Our free forex signals service trade today is a buy order on the USD/CAD pair.
On Friday, the USD/CAD currency pair dropped 0.10% below key support to consolidate weekly losses around 1.2815.
The Canadian dollar is following a break in the price of WTI crude oil, Canada’s main export commodity. Recent initiatives have been hampered by cloudy markets during the holiday season.
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A rise in US government bond yields on Thursday and positive results from the Fed’s favorite inflation indicator, the Core PCE Price Index, appear to have paved the way for a USD/CAD pullback. Canada’s GDP rose by 0.8% versus a 0.2% increase in October, which is a positive development.
Along with stronger US data, the uncertainty over Omicron terms and US stimulus measures also cast doubt on the pair’s future disadvantage.
On Thursday, the U.S. Food and Drug Administration (FDA) approved the Merck Covid-19 pill, the day after Pfizer approved the Omicron pill on Wednesday. Recently, the US military also announced the development of a single covid drug and its variants. Researchers have also found that Omicron has fewer options for hospitalization. However, the cancellation of orders for Merck pills in France is reaching its end, citing significantly less effect than anticipated – an increase in Omicron cases to challenge market optimism.
US President Joe Biden and House Speaker Nancy Pelosi are still hoping to get the Build Back Better (BBB) plan through the House, although Sen. Joe Manchin opposes it. CNN reports that Senator Joe Manchin effectively ended negotiations on the current version of the Recovery Efficiency Act due to concerns that certain provisions would increase inflation. Economists, however, believe the legislation will have a minimal impact on inflation.
Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis.
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