USD / CAD weekly forecast: BULLISH
- A strong recovery in the US labor market could highlight the announcement of the Federal Reserve’s QE exit strategy, raising both US Treasury interest rates and downturns
- USD / CAD reduction of speculation is likely to be supported in the short term
- In this article, we introduce the most important USD/CAD technical level to pay attention to next week
The near-term outlook for the USD / CAD has improved recently. Remarkable sstrength in the US labor market despite the risks of the renewed COVID-19, which is July employment resultsthe Fed is likely to lead strong hints at the Jackson Hole Symposium that the economy is on the right track “Significant progress” criteria for removing incentives in the coming months. As a consequence, traders can begin positioning for the opportunity a “Quantitative easing of the exit strategy” September FOMC meeting, which will increase and support the performance of the US Treasury green back.
With narrowing speculation running high, USD / CAD can be good on the spot reaffirm bullish especially after Canada’s employment data fell short of expectations. Recall that Canadaa the economy added 94,000 jobs in July, well below expectations for 165,000 growth. Needless to say, this country’s cooled labor market can undermine plans to reduce incentives, prompting the central bank to adopt a more neutral stance. Against this background USD / CAD‘s price activity may rise higher in the coming days as traders reduce their long-term position in the Canadian dollar.
From a technical point of view, USD / CAD support could not be penetrated close to 1.2475, was rejected from these levels and then Large as buyers bounce before the weekend seized control of the market. As long as prices remain higher rising trend line with a yellow line on the graph, the short-term bias is positive. However, in order to gain more confidence in a bullish dispute, the pair must rise decisively close to the 1.2590 moving average above 200 days. Should this scenario play out, we will see a bull near 1.2650 in the direction of resistance gain weight. A everyday would go beyond this technical barrier to facilitate travel to the highest level in July 1.2807.
About on the contrary, if the USD / CAD withdraws unexpectedly, first support appears 1.2475 (direction mentioned above). Moving down from this area can attract sellers and rejuvenate downside the pressure that triggers the decline to 1.2405, created by the June / July rally 50% Fibonacci retracement.
USD / CAD TECHNICAL TABLE
EDUCATIONAL INSTRUMENTS FOR TRADE
– Written by DailyFX market strategist Diego Colman