USD/CAD Pushes Upwards After Yellen's Comments
LiteForex Europe | Jan 20, 2017 06:59AM ET
During yesterday's trading the US dollar managed to rise, regaining a significant part of the previous losses. The US dollar was supported by positive macroeconomic statistics from the US: industrial production rose to 0.8% in December from 0.7% the previous month; utilization capacity rose to 75.5% in December from 75.0% the previous month; the consumer price index rose to 0.3% in December from 0.2% the previous month.
Moreover, the USD/CAD pair was pushed upwards after Janet Yellen’s optimistic comments on the current state of the US economy. Also, the Head of FRS noted that interest rates will be raised several times a year before the end of 2019. The Federal Reserve "Beige book" showed satisfactory growth of the US economy at the end of 2016 and in early 2017, which also added to investors optimism about the US dollar. As a result, the USD/CAD pair rose by more than 200 points, and reached the resistance level of 1.3272.
Today the attention of investors will be focused on the speech of Donald Trump. Newly elected US president recently said that the dollar is too strong, and this has a negative impact on the US economy. Investors responded by selling the US currency. Today his speech can also lead to an abrupt change in investor sentiment and to a surge in volatility on the USD/CAD.
On the 4-hour chart technical indicators confirm the continuation of the upward trend. Bollinger bands are getting wider. Histogram of MACD is in the positive zone, its volumes are growing, indicating “bullish” activity.
Support levels: 1.3251, 1.3206, 1.3173.
Resistance levels: 1.3272, 1.3311, 1.3346.
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