- It is clear that Trump will be the next president.
- Economists predict slower job growth in Canada.
- Market focus shifts to the FOMC policy meeting.
USD/CAD price analysis points to a sudden surge in bullish momentum as Trump takes the lead in the US presidential election. Some news outlets have already shown that Trump won the election, which boosted the dollar. Meanwhile, the Canadian dollar was vulnerable against the greenback ahead of domestic employment data.
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After weeks of speculation, the results are finally out and it’s more obvious that Trump will be the next president. Trump has proposed tariff and tax changes that are likely to be inflationary. Consequently, the Fed may need to reevaluate its policy toward being less dovish. This in turn will increase Treasury yields and the dollar.
At the same time, higher tariffs on imported goods will have a significant impact on the Canadian dollar. The Canadian economy exports almost 75% of its goods to the American market. Therefore, tariffs would affect exports and harm the economy.
Meanwhile, market participants await Friday’s employment figures from Canada. Forecasts show slower job growth, with the economy likely to add 27,900 jobs. Meanwhile, the unemployment rate could rise from 6.5% to 6.6%. The weaker-than-expected numbers could prompt the Bank of Canada to implement another big rate cut. On the other hand, if the economy creates more jobs than expected, the Canadian dollar will rise.
Market focus is slowly shifting from the US presidential election to the FOMC policy meeting. The US central bank will meet on Thursday and is likely to cut rates by 25 basis points. However, traders will pay more attention to messages about future rate cuts.
USD/CAD Key Events Today
Market participants will absorb the outcome of the US election as there will be no other key events.
USD/CAD Technical Price Analysis: Bears struggle to maintain control
From the technical side, USD/CAD the price bounced higher after finding support at the key 1.3825 level. The price has formed a bullish candle, indicating an increase in bullish momentum.
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However, before that, the price broke out of its bullish wedge. The breakout indicated a change in control from bulls to bears. However, if they fail to hold the price below the 22-SMA, they may revisit the resistance level at 1.3951. A break above would signal a continuation of the bullish trend.
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