Not only the European and US economies are performing very well these days, but also the Canadian economy is getting stronger as well. The IHS Markit Canada Manufacturing PMI has hit the level of 54.7 points, which was better than last month 54.4 points figure because stronger new order growth helped to underpin the sharpest improvement in business conditions across the manufacturing sector for three months in December. There were also positive signs for near-term growth, with survey respondents recording upbeat sentiment regarding the outlook for production levels in 2018. Moreover, a number of firms cited efforts to boost operating capacity, in response to an accumulation of outstanding business. The latest increase in backlogs of work was the fastest for almost three-and-a-half years in December. The details of the report revealed, that manufacturing business conditions continued to improve sharply in Alberta & British Columbia, Ontario experienced its strongest upturn in manufacturing conditions since May 2016 and Quebec also recorded an improved manufacturing performance during December.
Looking ahead, manufacturing companies are upbeat overall about their growth prospects for 2018. Around 36% of the survey panel forecast a rise in output volumes in the next 12 months, while only 7% expect a decline.
Let's now take a look at USD/CAD technical picture on the H4 time frame. The market has made a local low at the level of 1.2497 in extremely oversold trading conditions. The growing bullish divergence between the price and the momentum oscillator indicates a possible rebound towards the nearest technical resistance at the level of 1.2556 and 1.2598.
