USDCAD Technical Analysis / Forex Technical Analysis

USDCAD Technical Analysis – Bulls Key Support

The crucial point for investors in the USDCAD technical analysis is 1.3600, influenced by surging Oil prices and a resurgence in USD demand.

USDCAD Analysis: A Fundamental Outlook

Reuters – The USDCAD Market Analysis shows that the pair has been downward for three days, moving further away from its peak since March 24, around 1.3785. Crude Oil prices jumped about 4% during the Asian market hours due to growing tensions in the Middle East. This, along with positive job data from Canada last Friday, supports the Loonie (the Canadian dollar) and puts pressure on major currencies.

In Gaza, Palestine, the Hamas group launched several rockets at Israel, and Palestinian militants entered Israeli territory at various points. This led to a series of Israeli air strikes on Gaza, causing hundreds of casualties on both sides. These events increase the risk of a larger conflict in the Middle East and raise concerns about potential disruptions to oil supply, thereby pushing up Crude Oil prices.

On Friday, Statistics Canada announced that the economy added 63,800 jobs in September, keeping the unemployment rate steady at 5.5% for the third month. This exceeded market expectations. The average hourly wage increased to 5.3% from August’s 5.2% annual rise. This indicates that the labor market remains strong despite high-interest rates and increases the likelihood of further policy tightening by the Bank of Canada (BoC). From the US side, the headline Nonfarm Payrolls (NFP) exceeded even the most optimistic estimates and increased by 336K in September.

Moreover, the previous month’s reading was revised upwards to 227K from 187K initially reported. However, wage growth was relatively subdued and eased inflationary concerns, reassuring investors that the Federal Reserve (Fed) might soften its hawkish stance.

Despite this, USDCAD Market Analysis shows that data reaffirmed market expectations for at least one more rate hike by the US central bank in 2023, which continues to support elevated US Treasury bond yields. Besides this, the current risk-off environment supports the safe-haven US Dollar (USD) and should help limit further losses for the USDCAD pair. Traders might also prefer to wait for fresh cues about the Fed’s future rate hike path.

Therefore, attention now turns to USDCAD Market Analysis of the release of the FOMC meeting minutes due on Wednesday, followed by the latest US consumer inflation figures on Thursday. This will play a key role in driving USD demand in the near term. In the meantime, Oil price dynamics, broader risk sentiment, and speeches by influential FOMC members will be watched for short-term trading opportunities on Monday.

USDCAD Technical Analysis – Bulls Key Support

FxNews – The USDCAD technical Market Analysis reveals a bullish outlook for the USDCAD currency pair. The pair is undergoing a crucial test at the 1.3655 support level. The Relative Strength Index (RSI) indicator on the USDCAD daily chart maintains a position above the 50 line, suggesting a potential upward trend.

If the 1.3655 support level holds, it could reinforce the bullish scenario. The next target for the bulls would be the 1.39 resistance area, which could serve as a significant milestone in this bullish journey.

USDCAD Technical Analysis – Bulls Key Support

However, it’s important to consider the alternative scenario as well. If the bears push the USDCAD price below the 1.3655 support level and secure a close below this point, it could trigger a decline toward the 1.355 pivot point.

In conclusion, our USDCAD Market Analysis indicates that the pair’s future direction hinges on whether it can maintain support at 1.3655 or succumbs to bearish pressure and falls below this critical level. As always, traders should monitor these key levels and adjust their strategies accordingly.