Overnight the markets went into a flat drift in anticipation of the outcome of the Trump / Xi meeting at the G20 summit. The currency market the USD stays close to the minima achieved after dovish comments by the Fed's chief on Wednesday. The stock market makes modest profits.
EUR / USD spent the night near 1.1390, USD / JPY at 113.40, and GBP / USD at 1.2780. The volatility was very low. Most of the ordering of positions at the end of the month has already been made on the market.
The stock market also has an atmosphere of anticipation and hope for a compromise on trade issues between the US and China. Shanghai Composite is growing 0.7 percent today, and Japanese Nikkei225 has gained 0.4 percent.
On Friday, the last day of November, the event calendar is rich in important data releases, including German Retail Sales data, Switzerland KOF Economic Barometer data, Consumer Price Index from the Eurozone, Canadian GDP and Chicago Purchasing Managers Index data from the US. Moreover, there is a scheduled speech from FOMC Member John C. Williams.
USD/CAD analysis for 30/11/2018:
The market participants expect the Canadian GDP figures at the level of 0.1%, which exactly the same figure as in the last month. However, on the yearly basis, there is an expected decrease from 2.5% to 2.3%, so any improvement will be a big surprise for the markets and would make the CAD to appreciate across the board.
GDP is a significant report in FX Market, serving as one of the primary indicators of a country's overall economic health.
Robust GDP growth signals a heightened level of economic activity and often a higher demand for the domestic currency. At the same time, economic expansion raises concerns about inflationary pressures which may prompt monetary authorities to increase interest rates. Thus positive GDP readings are generally bullish for the Canadian Dollar, while negative readings are generally bearish.
Most production reports that lead to Canadian GDP are released before the official GDP number. Therefore, actual GDP figures usually confirm expectations. However, an unexpected release can move markets due to the significance of the figure.
Let's now take a look at the USD/CAD technical picture at the H4 time frame. The market is making higher highs and higher lows, so the trend is still up. The price is trading above the dashed violet trend line, which will act as a dynamic support around the level of 1.3180. Nevertheless, the nearest support is seen at the level of 1.3241 and there is still a change for bulls to move higher towards the technical resistance at the level of 1.3359. If this level is cleared, then the next target is the swing high at the level of 1.3385.
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