Crude Oil Rally helping the CAD

The US Dollar was bearish against all of its major pairs on Wednesday.

It was a busy day on the U.S. economic data front, the Mortgage Bankers Association's Mortgage Applications jumped 3.9% for the week ending November 20th, compared to -0.3% in the week before.

Initial Jobless Claims unexpectedly rose to 778K for the week ending November 21st (730K expected), from a revised 748K in the previous week. Continuing Claims fell to 6,071K for the week ending November 14th (6,000K expected), from a revised 6,370K in the prior week.

Wholesale Inventories rose 0.9% on month in the October preliminary reading (+0.4% expected), compared to a revised +0.7% in the September final reading.

GDP remained at +33.1% on quarter in the third quarter second reading (as expected), in line with the third quarter advanced reading.

Durable Goods Orders increased 1.3% on month in the October preliminary reading (+0.8% expected), compared to a revised +2.1% in the September final reading.

Personal Income dropped 0.7% on month in October (-0.1% expected), compared to a revised +0.7% in September. Personal Spending rose 0.5% on month in October (+0.4% expected), compared to a revised +1.2% in September.

The University of Michigan's Consumer Sentiment Index slipped to 76.9 on month in the November final reading (77.0 expected), down from 77.0 in the November preliminary reading.

New Home Sales declined to 999K on month in October (975K expected), from a revised 1,002K in September.

Finally, the Federal Open Market Committee's (FOMC) Meeting Minutes stated that financial conditions were little changed, on net and that economic data and stronger than expected corporate earnings helped support equity prices. However, the recent rise in Covid-19 cases across Europe and the United States, along with the US election has led to higher implied volatility in equity markets. In conclusion, the FOMC's view of future federal funds rates were little changed over the period.

On Thursday, US markets will be closed to observe Thanksgiving Day.

The Euro was bullish against most of its major pairs with the exception of the NZD and CHF. In Europe, no major economic data was released.

The Australian dollar was bearish against most of its major pairs with the exception of the CAD.

This week's biggest decliner among the major pairs was the USD/CAD declining 98 pips. Looking at the chart, the pair is testing an important area of support at the 1.299 level. A break below would confirm a continuation of the downtrend that began after posting March highs. A break below 1.299 could call for a test of 1.2805 support.

Source: GAIN Capital, TradingView

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