Solid News

USDCAD Market Update

8/29/2022 12:22 PM

During the Asian session, the USD/CAD pair is actively growing, trading around 1.3068. The asset is developing the "bullish" momentum formed last Friday, after the speech of the head of the US Federal Reserve, Jerome Powell, at the annual symposium in Jackson Hole.

In particular, the official spoke in favor of further tightening of monetary policy to bring record inflation under control. He confirmed the third rate hike by 75.0 basis points at the September regulator meeting. Despite receiving the first signs of some slowdown in US prices, the agency is still concerned about the current situation, which is a negative signal for the entire global economy, as the overall situation is complicated by the energy crisis and the onset of autumn in the northern hemisphere.

On Friday, American investors are waiting for the publication of the August report on the labor market: according to forecasts, the indicators will show signs of slowing down. At the same time, the country's economy remains strong enough to withstand a sharp increase in borrowing costs. Canada will report on the Q2 dynamics of gross domestic product (GDP): the new estimate suggests a revision of the previous dynamics from the growth of 3.1% to 4.3%.

Last week, it became known about the signing of an agreement on cooperation between the Canadian and German authorities in the production and transportation of hydrogen fuel. The deliveries to Germany, designed to replace the gas from Russia that fell under the sanctions and reorient to "green" energy to combat climate change, should begin in 2025. According to Chancellor Olaf Scholz, the agreement is a "historic step forward" and will drive the economy forward by creating new jobs.

On the daily chart, Bollinger Bands are actively growing: the price range expands, letting the "bulls" renew local highs. The MACD indicator grows, keeping a poor buy signal (the histogram is above the signal line). Stochastic after the active decline last week is recovering to its highs, indicating that the US dollar may become overbought in the ultra-short term.

Resistance levels: 1.3100, 1.3150, 1.3200, 1.3250. | Support levels: 1.3050, 1.3000, 1.2950, ​​1.2900.

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