Market Cap:
$271.6B
BTC Dominance:
65.13%
btc:
$9984.00
eth:
$221.12
xrp:
$0.32
Advertise
Forex

USDCAD: Heavy Week Ahead For the Pair

Axiory Global | Jul. 9, 2019
USDCAD: Heavy Week Ahead For the Pair

09 July, 2019 | Axiory -  The greenback ended sharply higher against most of its major peers on Friday, but failed to hold most of the gains against the Loonie, thus the USDCAD pair closed only 0.25% higher.

Friday’s labor market combo came out much more better for the US dollar than for the Canadian dollar. The US economy created 224,000 new jobs in June, well above 72,000 in May, while analysts had expected 160,000 new jobs. The unemployment rate ticked higher to 3.7%, which necessarily aint bad news for the economy as more people could have returned to the labor force. Wage growth fell short of expectations and accelerated 3.1% year-on-year.

Semiannual Monetary Policy Report might bring volatily in markets

The Canadian economy posted a negative change in employment, when it lost 2,200 jobs in June, well below 27,700 added in May. The unemployment also worsened by a notch to 5.5%. Therefore, its hard to understand why the USDCAD pair gave up most of the daily gains, while other pairs closed near daily highs for the US dollar.

Nevertheless, investors will now focus on this week’s major events – coming up on Wednesday.

Firstly, the Federal Reserve Chair Jerome Powell is due to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC. This event always brings with it elevated volatility on the financial markets, especially when something already not priced in is said. In this case, it could be a hawkish surprise, considering Friday’s good labor market data. His speech will continue on Thursday and investors must watch both days to not miss any market moving news.

At the same time on Wednesday, the Bank of Canada will decide about monetary policy. The main rate is expected to stay unchanged at 1.75%, however, the following commentary might be dovish, as seen elsewhere (other major central banks). Should this happen, the Canadian dollar will most likely come under selling pressure.

After these two events, there is another major one later in the evening – the FOMC minutes from the June’s Fed meeting. This could bring a fresh wave of volatility on the financial markets, the USDCAD pair included.

Thus, Wednesday will be the most important day for this pair, but for many others, considering the mentioned fundamental news.

USDCAD Technical Analysis

From the technical perspective, the pair is creating lower lows and lower highs, which is a definition of a bearish trend. Friday’s spike ended at the current bearish channel, which might have had a stronger impact on the price, then weak Canadian data.

This resistance is now at 1.31 and if the pair jumps above this zone, the actual downtrend could be over, targeting the 1.3140/1.3150 area in the initial reaction. Another big resistance is seen at previous lows at 1.3250 and if bulls push the price beyond this level, the short-term outlook could turn back to bullish.

On the downside, the short-term support is at last week’s lows at 1.3050 and if not held, the price could revisit the psychological barrier of 1.30. Strong bids are expected to be placed here. Its hard to define any other support levels below 1.30, thus the greenback might quickly retreat toward 1.29, should the 1.30 zone get breached.

About Axiory Global Ltd.

Axiory Global Ltd. is a privately held company, established in 2012, with its head office in Belize City, and its core business is the provision of online brokerage services for private and corporate traders with Forex and CFD leveraged products via its www.axiory.com portal.

Axiory Global Ltd., IBC No 127090, is a company authorized and regulated by the International Financial Services Commission of Belize.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.