COZforex: The US dollar rise against its Canadian counterpart on Monday, as expectations for further reductions in stimulus by the Federal Reserve still supported to the greenback ahead of US economic reports, to be released later in the day.

USD/CAD hit 1.0681 amid early US trade, the pair's highest since December 30; the pair subsequently consolidated at 1.0676, gaining 0.38%. COZFX strategist Nigel Boynton said, USD/CAD is predicted to find support at 1.0592, and a drop through could take it to the next support line of 1.0562. Meanwhile, the pair is predicted to find its first resistance at 1.0661, and a rise through could take it to the next resistance line of 1.0700.

The greenback remained supported after comments from outgoing Federal Reserve Chairman Ben Bernanke boosted the outlook for the US economy. On Friday, Bernanke said the US economy should continue to improve in 2014, but added that the recovery remains incomplete.

In Canada, official data showed that raw materials price inflation declined 4.1% in November, more than the expected 2% drop, after a 2.3% decline the previous month.

In the euro zone, data showed that the bloc’s services purchasing managers’ index came in at 51.0 in December, unchanged from the preliminary estimate and down slightly from 51.2 in November.

Separate reports showed that activity in Spain’s private sector expanded at the fastest rate in 77 months, but activity in France and Italy contracted last month.

(COZ forex UK)