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Fundamental
Overview
The USD weakened across the
board yesterday following soft ADP data and a Bloomberg report saying that Hassett emerged as the
frontrunner for the Fed Chair position.
The greenback was already
under some pressure caused by Fed’s Williams endorsement for a December cut on Friday. The
probability for a December cut is now at 76%, which generally makes it a done
deal.
We won’t get much data
before the FOMC meeting, so the focus will likely be mainly on jobless claims
and ADP data. Weak data should keep weighing on the greenback, while strong
data could provide some short-term support. At the end of the day though, it’s
all about the FOMC decision and the following NFP and CPI reports.
On the CAD side, the BoC
cut interest rates by 25 bps at the last meeting as expected bringing the
policy rate to the lower bound of their estimated neutral rate range of
2.25%-3.25%. The central bank has also signalled that they reached the end of
their cutting cycle, although they kept the door open for another cut if
needed.
The recent data gave the
BoC all the reasons to remain on the sidelines as we got another strong Canadian
employment report and the inflation data showed the Trimmed Mean CPI Y/Y
remaining around 3%.
USDCAD
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that USDCAD bounced near the upward trendline and extended the gains into
the recent highs. If we were to get another pullback, we can expect the buyers
to lean on the trendline with a defined risk below it to keep pushing into new
highs. The sellers, on the other hand, will want to see the price breaking
lower to extend the drop into the 1.3887 level.
USDCAD Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we have a minor support zone around the 1.4060 level. The buyers will
likely continue to step in there with a defined risk below it to keep targeting
a rally into the recent highs. The sellers, on the other hand, will look for a
break lower to pile in for a drop into the major trendline.
USDCAD Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor downward trendline defining the recent pullback. The
sellers will likely continue to lean on the trendline to keep pushing into new
lows, while the buyers will look for a break higher to increase the bullish
bets into the 1.4130 resistance. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures. Tomorrow, we have the US
Thanksgiving holiday which is likely to make the final part of the week more
rangebound. Finally, on Friday we conclude the week with the Canadian GDP
report.
This article was written by Giuseppe Dellamotta at investinglive.com.
In terms of where the range that they are expecting for gold, it is from $3,950 to $4,950 in 2026. On the bump higher, Deutsche cites continued central bank demand as a key reason:
“Third quarter supply-demand data supports a continued central bank bid. The positive structural picture shows inelastic demand from central banks and ETF investment diverting supply from the jewellery market. Also, overall growth in demand outpaces supply.”
Before adding that:
“Gold often exhibits a positive correlation to risk, so a deeper equity market correction would be damaging, as would our House view for less Fed easing than the market expects in 2026 (-50 bps vs -93 bps). A negotiated end to the Russia-Ukraine conflict would be a temporary negative. In the bigger picture, reserve managers could slow their pace of buying, and dramatic increases in real gold prices are often followed by significant corrections.”
With their more bullish outlook on gold prices, they also see that as having spillover effects to other precious metals as well.
“Consecutive years of undersupply enables silver, platinum, and palladium to participate more fully in gold’s strength. Elevated lease rates indicate physical scarcity which affects industrial users, many of whom prefer to lease than own. We expect supply-demand to remain in deficit for silver and platinum next year, while palladium is balanced.”
This article was written by Justin Low at investinglive.com.
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