The USDCAD pair continued gaining positive traction for the fourth consecutive session and climbed to over two-week tops in the last hour. What region is the pair likely to confront immediate resistance? Examine the following 4 September USDCAD Technical Forecast.
4 September, OctaFX – The pair built on last week’s goodish rebound from sub-1.2900 level, or 2-1/2 month lows, with a combination of supporting factors assisting bulls to extend the positive momentum further beyond the 1.3100 handle.
NAFTA concerns continue to weigh on CAD
Escalating global trade tensions, especially the US President Donald Trump’s threat to exclude Canada from a new NAFTA agreement, continue to dent sentiment surrounding the Canadian Dollar.
This coupled with resurgent US Dollar demand on Tuesday, supported by a goodish pickup in the US Treasury bond yields, provided an additional boost and further collaborated to the pair’s ongoing up-move.
Meanwhile, traders seemed largely unaffected by the ongoing bullish run in crude oil prices, which tend to underpin demand for the commodity-linked currency – Loonie, and kept pushing the pair higher through the early European session.
It would now be interesting to see if bulls are able to maintain their dominant position or the up-move meets with some supply at higher levels as market participants start repositioning for the latest BoC monetary policy update on Wednesday.
In the meantime, today’s release of the US ISM manufacturing PMI will be looked upon for some short-term trading impetus later during the early North-American session.
4 September USDCAD Technical Forecast
Any subsequent up-move is likely to confront immediate resistance near the 1.3050-55 region, above which the pair seems all set to aim towards reclaiming the 1.3100 round figure mark. On the flip side, the 1.3085-80 region now seems to protect the immediate downside, which if broken might prompt some additional weakness back towards 1.3040-35 horizontal zone.
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