Fundamental View of USDCAD

The USDCAD set is under strain as it attempts to keep up its rebound over the psychological barrier of 1.3500 mark today. The CAD currency is projected to continue its downward trend since the wider demand for the USD stays low. Owing to strong investor hopes that the US Fed would cut borrowing costs during its Jun board session.

The US NFP data for Feb, issued on Friday, showed joblessness jumped to 3.9 percent. Which is the greatest level in the last two years but still within the safe limits. Yet every month wage increases is substantially lower. On the flip side, recruitment needs remained solid, with companies hiring 275K employee vs predictions of 200,000.

Highlights & Considerations

USDCAD pair battles to maintain its comeback across 1.3500 against the weakened US currency.

Dropping American labor market trends suggest that US Fed rate cuts for Jun remaining on the agenda.

More gradual the Canadian wage increase suggests that the rate of inflation forecast is easing.

Economic Manifestations

Moving ahead, the USD is going to be affected by the CPI figures for the month of February. That is scheduled for release on Tuesday and will offer fresh views into the federal funds rate forecast.

From the CAD face, sluggish job growth has dampened inflation expectations. Yearly hourly earnings on average increased at a much slower speed of 4.9 percent in Feb. Comparing to a 5.3 percent growth in Jan. This could lead officials at the BOC to explore lowering rate of interest forward.

Technical Analysis & Perspective

On the daily timescale, the dollar versus CAD moves within the Rising Band trend trend. The graph’s pattern shows an upward tilt with modest capacity. While investors view each downturn as an opportunity to buy. Short-term desire is negative, since the CAD has traded beneath the 20 D-EMA. – currently sitting at 1.3510 zone.

The 14-time frame RSI fluctuates between 40.00 and 60.00 points, showing those who trade indecision.

Source: TradingViewShould the currency pair rise over its Jan 17th top of 1.3542, it is headed to the 13th of February peak at 1.3586 mark. Backed through the rounded-mark hurdle of 1.3600 area.

On the other hand, a decline beneath its Feb 22nd minimal at 1.3441 mark could bring the pair to the 9th of February bottom at 1.3413 band. A fall under the former will keep moving lower until it reached the 15th of January bottom of 1.3382 level.

5- Hourly Technical Indicators & Signals