After edging down to 1.2990 area in the early Asian session on Monday, the USDCAD gained traction and rose above the 1.30 mark as the greenback continued to gather strength after ending the previous week on a strong note. What is next? Gain insight into today’s 6 August USDCAD Technical Forecast.
6 August, GKFX – As of writing, the pair was trading at 1.3025, adding 0.25% on the day. Friday’s employment report from the United States showed that there was no reason for the Fed to hold off further rate hikes as the wage inflation remained steady at an annual rate of 2.7% and the unemployment rate eased to 3.9%.
Although the headline NFP came in below expectations, both May and June’s figures got revised upwards. The CME Group FedWatch Tool now shows that markets are pricing a probability of 93.6% and 66.7% in September and December respectively.
Crude oil recovery caps the pair’s gains
A lack of fresh fundamental drivers allows investors to remain focused on the Fed’s tightening policy and helps the US Dollar Index push higher. At the moment, the DXY is up 0.26% on the day at 94.40.
In the meantime, crude oil, which came under pressure amid escalating trade concerns on Friday, is staging a robust recovery with the barrel of West Texas Intermediate gaining nearly 1.5% at mid-69s. The commodity-sensitive loonie is taking advantage of the oil rise on Monday to show resilience against the buck.
There won’t be any other macroeconomic data releases in the NA session and the pair is likely to fluctuate in its daily range.
6 August USDCAD Technical Forecast
With a decisive break below 1.30 (psychological level(, the pair could extend its losses toward 1.2965 (Aug. 2 low) and 1.2920 (Jun. 8 low). On the upside, short-term resistances align at 1.3090 (20-DMA), 1.3140 (50-DMA) and 1.3215 (Jul. 12 low).
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