- The US Dollar recovers somewhat and rises against the Canadian Dollar.
- The S&P Canadian and US global manufacturing PMIs for December will update the current status of factory activity.
- USD/CAD Price Analysis: Range bound, unable to break above/below 1.35/1.36 range.
usd/cad Jumps near the 50-day EMA at 1.3532 and moves towards the 20-day EMA during the first trading day of 2023 in the North American session amid tight liquidity conditions as most markets are closed for New Year’s Eve celebrations Live At the time of writing, the USD/CAD pair was trading at 1.3573 after hitting a low of 1.3535.
European shares are trading higher against the backdrop of low volume. The dollar index, which measures the dollar’s value against a basket of six currencies, rose 0.14% to 103.63 from a six-month low hit at 103.38 last week. The lack of economic data in the US and Canada makes traders keep an eye on market sentiment and technical data.
The S&P Global Manufacturing PMI for both countries will be released on Tuesday’s economic calendar, with Canada’s PMI expected to fall to 49.2, down from last month’s reading of 49.6. For the United States, the PMI is forecast to remain unchanged from November’s reading of 46.2. Meanwhile, the ISM Manufacturing PMI reading for Wednesday is expected to continue to contract below the 49.0 mark, raising the prospect of a US recession. In addition to the ISM report, the minutes of last December’s meeting of the Federal Reserve (Fed) will be published in the US agenda, which will shed some light on the monetary policy outlook for 2023.
USD/CAD Price Analysis: Technical Perspective
From a daily chart perspective, USD/CAD remains within known technical levels, unable to break the bottom/top of the 1.3500/1.3600 range capped by the 20 and 50 day EMAs. Oscillators such as the Relative Strength Index (RSI) and the Rate of Exchange (RoC) broke out of the bearish zone, opening the door for further USD/CAD gains. However, as long as the USD/CAD pair does not break above 1.3600, the door may open towards 1.3700. On the other hand, if the USD/CAD pair breaks below 1.3500, it could pave the way for a four-week low below 1.3484.