USD/CAD: near-term outlook
By Mark Jensen
USD/CAD is consolidating above the uptrend support line since late 2014 which is currently at 1.0615. The pair’s attempt to recover this week failed at 1.0693 because of the broader weakness of the US dollar. The pair has approached the significant support area and is trying to base.
As the daily MACD and RSI started rising, the pair can recover to 1.0700 (upper Bollinger band at H4), 1.0725 (50% Fibo of the advance from September 2013 to March 2014, upper daily Bollinger) and 1.0750. The overall trend will remain negative as long as the pair stays below 1.0800 (200-day MA, downtrend resistance line). Support is at 1.0620, 1.0600 and 1.0570.
Analysts at TD Securities point out that although US Treasury yields have moved lower post non-farm payrolls, Canadian yields have declined in tandem.
Pay attention to Canada’s employment report due tomorrow (12:30 GMT). The Bank of Canada will meet next week, on Wednesday, July 16. According to TD Securities the BOC will remain neutral trying to balance higher-than-expected inflation and lower-than-expected GDP.
Chart. Daily USD/CAD