CAD recovers as data from the US benefits the US dollar. Following the announcement of ambiguous US statistics, the USD gains pace.
CAD Key Points and Considerations
After the publication of conflicting US data, notably positive job figures, the USD gains momentum.
Increases from the positive forecast for crude oil are reversed for the CAD
The belief in which the BoC is going to maintain rates of interest higher than the Fed for a longer period of time. – Is a factor supporting the Canadian currency.
CAD Fundamental Backdrop
On the strength of optimistic prospects for crude oil, Canada’s main export. The Canadian currency edged up vs the Greenback for four days in succession on today. Although the US dollar rebounded as a result of a spate of macroeconomic data emits. Notably figures of less-than-estimated Initial Jobless Claims. Early advances have since partially been returned.
Another reason boosting the Canadian dollar is the chance that the (BoC) might keep elevated rates for a longer period in order to battle stubborn inflation. Given the market’s ongoing assumption of the US Fed will decrease rates comparatively sooner, in H1 for 2024.
Technical Outlook
On the weekly graph, USDCAD is most likely in an ongoing upswing that started near the 2021 lowest points. The currency rate continues to be consolidating laterally inside that upswing from October 2022. Yet, the likelihood of an ultimate extension of rising longs against shorts
Previous week’s slide was halted from going much further down by a cluster of support located in the high 1.3000s. Which is composed of multiple more extended MA into a key trend line. This support served as a base for the revival between Friday to Monday.
When contrasted to the low of June 27, the (RSI) aligns bullishly with price reaching the lowest points of July. The RSI remained less at the lowest points of June 27. When it had been in July even though the market price was greater. This is an optimistic indication since it shows fundamental resilience.
The USDCAD longer-term rise has to be decisively broken over the 50-day (SMA), which is located at 1.3400 mark. However, chances are somewhat in the direction of a rebound and continued move upward, giving bulls a little advantage.
On the other hand, a clear breach under 1.3050 might suggest that the strong support zone in the high 1.30s may have irrevocably broken- Casting suspicion on the upswing.
