CAD: Canadian Dollar continues to consolidate, however the reversal is possible
At the Forex currency market the Canadian Dollar rate continues to rise at the beginning of the last week of this year –oil prices remain close to the highs, while the market is thin.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is going up, which makes it possible a pair buy signal possible. Stochastic Oscillator has come into oversold zone and is not giving a clear signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0085 the pair will go to the key levels of 1.0096 and 1.0100. If the level of 1.0055 is exceeded, traders’ targets will be the levels of 1.0040 and 1.0010.
According to Flaherty there is no need to extend economic incentives program at the moment; however its reduction is not provided for either, as economic upturn is required in the country.
However, economists are still concerned by the fact of Canada’s proximity to the USA and endless pressure on the Canadian economy in the issues of export. Interest rate in Canada is at the level of 1% per annum. The last increase which took place in September this year was by +25 basis points. There is an opinion at the market now that the Bank of Canada will not change the interest rate until QII next year as economic recovery rate has slowed down in the country. The rate was increased 3 times in a row this year and at the last meeting of 19 October the regulator decided not to change it again.
We would remind that core consumer price index in Canada remained unchanged in November, following the growth by 0.4% in October; at the same time growth on annual basis has declined to 1.4% against the previous level of 1.8%.
Therefore, inflation demonstrated minimal increase last month for over then 2 years. It became an indicator for the Bank of Canada that interest rates will remain unchanged for quite a long time.
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