Those that are bullish USD/CAD can take comfort from monthly seasonal trends that suggest this currency pair has a tendency to register gains in November.
Seasonal analysis of USD/CAD's November performance since 2000 shows it has risen in 14 of the past 21 years. While seasonality should not be considered in isolation, it's a useful tool when combined with other factors.
The Canadian dollar weakened to its lowest level in nearly a week against its U.S. counterpart on Tuesday, as oil prices fell and investors grew cautious ahead of an expected reduction of economic stimulus by the Federal Reserve.
The USD/CAD weekly chart is showing potential for a bigger recovery: it is on course to register its third weekly rise in a row. Those that are bullish USD/CAD, need it to break and end the week above 1.2445 Fibonacci level, a 23.6% retrace of the 1.2949 to 1.2289 (August to October) drop.
(Martin Miller is a Reuters market analyst. The views expressed are his own) ((martin.miller@thomsonreuters.com))
