Solid News

USDCAD Market Update

9/9/2022 2:06 PM

During the Asian session, the USD/CAD pair is steadily declining, developing the "bearish" momentum that formed last Wednesday, when the trading instrument was preparing to renew its local highs from July 14.

Noticeable support for the Canadian currency in the middle of the week was provided by the decision of the Bank of Canada to raise the interest rate by 75.0 basis points, which indirectly confirms the expectations of American investors about a similar step by the US Federal Reserve. Also, the asset is positively affected by data on business activity from Ivey: in August, the indicator rose from 53.2 points to 57.1 points, which was better than the average analysts' forecasts.

The focus of investors on Friday is the Canadian labor market report for August: current forecasts suggest an increase in employment in the country by 15.0K after a decrease of 30.6K last month, but the unemployment rate is expected to rise from 4.9% to 5.0%. The median hourly wage is likely to remain flat at around 5.44%.

On the daily chart, Bollinger bands reverse into a horizontal plane: the price range is narrowing from below, indicating a sharp change in trading direction in the short term. The MACD indicator is going downwards, keeping a strong sell signal (the histogram is below the signal line). Stochastic keeps a confident downward trend but is quickly approaching its lows, indicating that USD may become oversold in the ultra-short term.

Resistance levels: 1.3050, 1.3100, 1.3150, 1.3200. | Support levels: 1.3000, 1.2950, ​​1.2900, 1.2850.

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