FxWirePro: USD/CAD outlook weaker on renewed downside pressure

• USD/CAD dipped on Tuesday   as a recent improvement in risk appetite offset softer-than-expected domestic GDP data.

• Official figures released Tuesday showed Canada’s economy shrank 0.3% in October, its biggest monthly drop in almost three years, but a partial recovery is expected in November..

• The monthly decline was the largest since December 2022, when output also fell 0.3%. Goods production dropped 0.7%, while services slipped 0.2%.

• On December 10, the Bank of Canada held its policy rate at 2.25%, as Governor Tiff Macklem said the economy had remained broadly resilient to tariffs and policy settings were consistent with the 2% inflation goal.

• Money markets are predicting the Bank's next move will be a 25 basis point hike, most likely in July 2026.

•  Immediate resistance is located at 1.3740(38.2%fb), any close above will push the pair towards 1.3897(50%fb).

• Support is seen at 1.3674(23.6%fb) and break below could take the pair towards 1.3645(Lower BB).

Recommendation: Good to sell  around 1.3700, with stop loss of 1.3800  and target price of 1.3650