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USDCAD is Consolidating Around 1.350

4/10/2023 11:59 AM

During the Asian session, the USD/CAD pair shows flat trading dynamics, trying to consolidate above the psychological level of 1.3500.

Moderate support for quotes is provided by the report on the American labor market for March, published on Friday: the unemployment rate fell from 3.6% to 3.5%, which strengthened investor confidence that the US Federal Reserve will raise interest rates by 25 basis points during the May meeting, which is currently expected by more than 60.0% of analysts.

The Canadian report, released a day earlier, also was quite optimistic: unemployment remained at 5.0%, although experts expected it to rise to 5.1%, and the change in the number of employees increased by 34.7K after an increase of 21.8K a month earlier, compared to forecasts of 12.0K. The average hourly wage corrected from 5.4% to 5.2%, and the Ivey business activity index rose from 51.6 points to 58.2 points, ahead of analysts' forecasts of 56.1 point.

On Wednesday, investors are waiting for the decision of the Bank of Canada on monetary policy: experts believe that the regulator will take a wait-and-see attitude and keep the interest rate at 4.5% but an increase of 25 basis points is also possible.

On the daily chart, Bollinger bands are steadily declining: the price range is narrowing from below, reflecting the emergence of corrective growth in the short term. The MACD indicator is growing, keeping a relatively strong buy signal (the histogram is above the signal line). Stochastic maintains a strong upward direction but is rapidly approaching its highs, indicating that the American dollar may become overbought in the ultra-short term.

Resistance levels: 1.3550, 1.3600, 1.3650, 1.3700. | Support levels: 1.3500, 1.3450, 1.3400, 1.3350.

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