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With bearish sentiment still reigning on the Greenback and oil prices in rally mode, the down trend in USD/CAD is one to watch on the session ahead of the latest FOMC meeting minutes.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on AUD/JPY for a potential retracement play, so be sure to check that out to see if there is still a potential play!

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Fresh Market Headlines & Economic Data:

Dow falls more than 150 points a day after soaring past 30,000

Oil prices rally further on vaccine optimism despite inventory rise

Xi Seeks to ‘Manage Differences’ in Note Congratulating Biden

U.S. Goods-Trade Gap Widens as Imports Rise to Highest in a Year

U.S. Durable Goods Orders Expand Faster Than Expected in October

U.S. Personal income -0.7% in Oct. Core PCE Price Index was 0.0% in Sept.

EU chief says no-deal still possible despite progress in UK trade talks

EU prepared for no-deal Brexit, says Ursula von der Leyen

Germany plans Christmas curbs as COVID-19 deaths hit record

Joe Biden says UK and Ireland must not have hard border

U.K. Boosts Debt Sale Plan to $648 Billion to Help Economy

U.S. hits highest death toll since May with hospitals already full

Upcoming Potential Catalysts on the Economic Calendar

Baker Hughes Oil Rig count at 6:00 pm GMT
FOMC Meeting Minutes at 7:00 pm GMT
New Zealand Trade Balance at 9:45 pm GMT
Australia Private Capital Expenditure at 12:30 am GMT (Nov. 26)
Japan Leading Index at 5:00 am GMT (Nov. 26)

What to Watch: USD/CAD

USD/CAD 1-Hour Forex Chart
USD/CAD 1-Hour Forex Chart

On the one hour chart above of USD/CAD, we can see the pair just made a move lower, breaking below a range pattern between the 1.3050 – 1.3120 handles last week. The pair is currently finding short-term support at the major psychological level of 1.3000; will the bulls hold there or is a breakdown ahead?

Well, the latest FOMC meeting minutes could spark volatility if it breaks expectations of being a dud. Rhetoric from the notes is likely to remain inline with uncertainty over the possibility of when government stimulus may come, and the economic outlook as long as the pandemic persists and lockdown protocols return.

But even if we don’t get any fresh surprises, the 1.3000 could break as global risk sentiment continues to move more positively on the direction vaccine news has taken in recent weeks, and as the U.S. administration begins its transition from the Trump team to the Biden team, reducing geopolitical uncertainty.

With that in mind, sticking with the trends seems like the higher probability move at the moment for a potential swing play as intraday volatility may remain quiet ahead of the U.S. taking holiday this week.

For those bearish on USD/CAD, or even bullish on oil prices, considering scaling into a short position up to last week’s range. With a daily ATR of around 90 pips, we could see a move up to the 1.3100 handle before sellers hop in, depending on what we get from the news cycle through the next session.

A down side break of 1.3000 on strong news / dovish FOMC meeting minutes is something to watch out for as well as that would likely attract more USD sellers, turning that fresh break lower into a momentum move.