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USDCAD Market Update
2/7/2023 1:48 PMThe USD/CAD pair is rising to the level of 1.3470 due to the publication of strong statistics on the US labor market last Friday.
According to official data, the change in the number of people employed in the non-agricultural sector in January amounted to 517.0K, which more than 2.5 times exceeded the forecast of 185.0K and turned out to be higher than the previous value of 260.0K, while unemployment adjusted to a record 3.4% with 3.6% expected by analysts and the previous value of 3.5%.
Against this background, the main attention in the USD/CAD trading is given to the USD, and the data on the Canadian economy only support the current upward movement. Thus, construction permits in Canada for December in monthly terms fell by 7.3%, which was lower than the forecast of -5.0% and the previous value of 14.9%. At the same time, the Ivey Purchasing Managers' Index for January rose sharply to 60.1 points, which is much higher than the estimated 42.3 points and the previous 49.3 points.
Today at 19:45 (GMT+2), the Governor of the Bank of Canada, Tiff Macklem, will give a speech. If the official verbally supports the tight monetary policy of the regulator, then we can expect some decline in the USD/CAD pair. If the rhetoric is soft, the growth is likely to continue with a target at 1.3500.
As part of a long-term downtrend, sellers were unable to update the November 2022 minimum last week. Instead, the price has reversed upwards and is now heading towards the resistance level of 1.3500. If the mark is held, the decline is likely to continue with a target at 1.3250. If the 1.3500 level is broken out, then a new upward momentum will begin with a target at the maximum of December last year in the area of the resistance level of 1.3670.
The mid-term trend is still downtrend. At the moment, the price is trading in a correction, the likely target of which is to test the key resistance of the trend 1.3532–1.3509. After reaching this zone, it will be possible to consider new sales of the instrument with a target at last week's low of 1.3265. With a breakout of the 1.3532–1.3509 area, the mid-term trend will change to an upward one.
Resistance levels: 1.3500, 1.3670. | Support levels: 1.3250, 1.2970.
