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Canadian Economy Shows Resilience

9/2/2022 1:14 PM

The Canadian dollar is confidently resisting the rapid upward dynamics of the US currency, correcting upwards around ​​1.3158. Quotes are supported by strong macroeconomic statistics, which confirm that the national economy is coping with pressure from the hawkish policy of the Bank of Canada.

Thus, in June, the growth of gross domestic product (GDP) amounted to 0.1%, as a result of which the indicator for the second quarter rose by 0.8%, while the annual value of the index consolidated at 4.56%, which exceeds 2. 90% earlier, and over the year it increased by 3.3%, although in the first quarter experts predicted a value of 3.1%. On Wednesday, September 7, a meeting of the Bank of Canada will be held, at which a decision will be made on further tightening of monetary policy: according to preliminary forecasts, the regulator may raise the interest rate by 75.0 basis points, bringing it to 3.25%. The agency hopes inflation will be controlled before a recession begins in the country, which, given macroeconomic statistics, is quite realistic.

The US dollar is trading around 109.500 in the USD Index, having strengthened after the Initial Jobless Claims publication, which amounted to 232.0K against 237.0K a week earlier. Today, the release of the Nonfarm Payrolls report is expected: if the indicator exceeds the analysts' forecast of 300.0K, it will give the national currency an additional impetus for growth.

On the daily chart, the price is moving within a wide ascending channel with dynamic boundaries 1.2600–1.3200, coming close to the resistance line. Indicator Alligator's EMA oscillation range expands upwards, and the histogram of the AO oscillator forms rising bars in the buying zone.

Resistance levels: 1.3201, 1.3380. | Support levels: 1.3055, 1.2758.

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