USD/CAD Testing the 50 SMA As Support After Higher Earnings in Canada

USD/CAD made a reversal at the start of January, which has been developing a bullish trend this month, with moving averages acting as support. Right now we are looking to open a buy USD/CAD signal after the retreat since yesterday, as the price is testing the 50 SMA which should hold as support.

The US economic data from the US has been positive as today’s GDP report for Q4 showed, helping keep the Buck in demand. However, the USD has been retreating since yesterday as inflation slows. In Canada, the economy is also showing mixed signals, with inflation returning in recent months while today’s earnings figures showed a decent jump for November.

Yesterday we had the BOC policy meeting, with the rhetoric in the comments indicating that the Bank of Canada is shifting toward a dovish stance and is no longer considering raising rates. and that interest rates have reached their peak. The BOC chose to move away from previous terminology that alluded to whether monetary policy is restrictive enough, shifting the rhetoric toward the period of time needed to keep the current level of interest rates.

USD/CAD has retreated below 1.35, but the decline has stalled as it remains supported by moving averages. So, despite the higher earnings numbers presented below, the bullish movement in this pair remains encouraging as long as the price stays above the 50 SMA. We will keep the bullish bias for this pair after the dovish tilt from the Bank of Canada.

Canadian November Weekly Earnings Report

Year-over-Year (YoY) Changes:

• November weekly earnings YoY: +4.1%
• Compared to the prior month’s YoY change: +3.9%
• Average weekly hours YoY: +0.6%

Month-over-Month (MoM) Changes:

• Earnings MoM for November: +0.6%
• Compared to the prior month’s MoM change: +0.0%

Job Vacancies:

• Job vacancies in November: -24.4% compared to January

USD/CAD Live Chart