Chart of the Day − USD/CAD

USD/CAD – The key USD/CAD pair (a daily chart of which is shown) is giving off some clear, yet conflicting, technical signals. After coming down from a rather precise double test of the 1.3000 price region, the pair has settled down somewhat to adhere to a significant uptrend support line (the steeply angled green line) that began back in late September.

A true double top formation, of course, would not be confirmed unless price dropped below the trough between the double peaks. The level of this trough is approximately 1.1470, which is around 1000 pips below the current price. In the meantime, as mentioned, price is currently respecting the dynamic support offered by the steep uptrend line after dropping from the second peak of the double test.

Any continued upward momentum could once again target the 1.3000 region. Somewhat more likely from a technical perspective, however, we should eventually be seeing a breakdown of the uptrend support line, in which case price should initially target the 1.2100 level, a key prior support/resistance region.

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GLOBAL MARKETS-Asian stocks, oil rebound, but caution prevails

HONG KONG, Dec 3 (Reuters) - Asian stocks and oil recovered on Wednesday following recent sell-offs, but low-risk assets such as U.S. Treasuries also retained their lustre, highlighting investor caution about the weakening global economy.

The euro and the sterling fell ahead of meetings on Thursday by the European Central Bank and the Bank of England, which are expected to result in hefty interest rate cuts as policymakers try to avoid off a deep and prolonged recession.

Governments and central banks worldwide are passing more measures to stabilise financial markets, including potential help being discussed for struggling U.S. auto makers, but it will take some time to restore battered consumer and investor confidence.

"It is difficult to see the rally in equities being sustained and it will not take much in the way of more bad economic news to bring a dose of reality back," Calyon analysts said in a note to clients on Wednesday.

The MSCI index of Asia-Pacific stocks outside Japan rose 1.3 percent as of 0255 GMT, rebounding from a 4.1 percent slump in the prior session.

The gains tracked a rally in Wall Street on Tuesday that came following a pledge by global industrial bellwhether General Electric to leave its dividend intact despite the worsening economy.

Still, the outlook for the global economy continues to weaken, with Australia saying on Wednesday that growth in the last quarter was at its slowest pace in eight years.

Corporate profits worldwide are also under threat as consumers cut back spending. U.S. auto makers on Tuesday posted a nearly 37 percent plunge in monthly sales that brought levels to their lowest in since 1982, reinforcing their plea for a bailout from the U.S. government.

Asian markets gained, nonethless, led by shares seen as oversold, though that was balanced by weakness in some auto makers such as Honda Motor and technology exporters such as Samsung Electronics whose profits are set to suffer.

Tokyo's Nikkei average advanced 1 percent, clawing back some ground after a drop of more than 6 percent on Tuesday.

Shares in Hong Kong, Shanghai, Singapore , and Australia gained more than 1 percent each, but markets in South Korea and Taiwan posted modest losses.

Among the advancers in the region, shares in Australia's Qantas Airways rose 6.2 percent after saying it was in talks with British Airways to form a dual-listed airline that could be worth almost $6 billion at current market prices.

EYE ON CENTRAL BANKS
Oil prices gained 78 cents to $47.74 a barrel after steep drops in prior sessions that had left it at three-and-a-half year lows. However, the outlook remains weak ahead of data later in the day expected to show a third consecutive week of rises in U.S. crude inventories as economic growth and fuel demand slow.

Crude prices may find it hard to rally much farther in the short-term given that only two-thirds of members of the Organization of the Petroleum Exporting Countries (OPEC) are meeting their pledge to lower output in November, according to a Reuters survey.

The European Central Bank meets on Thursday, and most economist still expect an interest rate cut of only 50 basis points, despite a stream of poor economic data and a sharp drop in inflation that had raised hopes for a larger easing.

On the other hand, the Bank of England is expected to cut rates by an aggressive 100 basis points, while financial markets have priced in a 150 bps cut from New Zealand's central bank, both scheduled for Thursday.

Ahead of the decisions, the euro fell 0.4 percent to 118.05 yen and eased 0.1 percent to $1.2695 against the dollar. The sterling slid 0.5 percent to 138.32 yen , crawling towards 13-year lows hit just above 137 yen the previous day.

The dollar slipped 0.2 percent from late U.S. trading on Tuesday to 92.97 yen, hovering near a five-week low of 92.63 yen hit on trading platform EBS the previous day.

U.S. Treasuries were range-bound after gaining on Tuesday amid safe-haven bids, anticipation of more rate cuts and the possibility that the Federal Reserve could buy long-dated U.S. government bonds.

Yields on benchmark 10-year Treasury notes were range-bound at 2.71 percent, while those for the 2-year note gained by about 4 basis points to 0.94, still below the Fed's 1.00 percent target rate for overnight lending between banks.