USD/CAD Price Analysis – Aug 20, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair staged a modest recovery from a one-month low, holding around the 1.3625 level.
The rebound can be attributed to a mix of factors including a decline in Crude Oil prices and a modest recovery in the US dollar.
Despite the bounce, the pair remains below the mid-1.3600s as traders adopt a cautious approach ahead of crucial Canadian inflation data.
Impact of Crude Oil Price Decline and Canadian Inflation Data on USD/CAD Pair
Crude Oil prices have been on a downward trend, largely due to optimism surrounding a potential ceasefire in Gaza, which has reduced the risk premium associated with oil prices.
As Crude Oil prices decline, the Canadian Dollar, which is closely tied to oil exports, has weakened.
This decline in oil prices, coupled with expectations of a lower headline Canadian Consumer Price Index (CPI), is influencing the USD/CAD pair.
The Canadian CPI is anticipated to show a decrease for the second consecutive month, signaling a slowdown in inflation.
This could lead the Bank of Canada (BoC) to adopt a more accommodative policy stance, potentially easing monetary policy in response to weak inflation and a slack labor market. Such a scenario would likely weigh on the CAD, bolstering the USD/CAD pair.
Impact of US Dollar Strength and Fed Policy on USD/CAD Pair
On the US side, the dollar has shown a modest recovery from its lowest level since January. This recovery is partly due to a general rebound in the US dollar amid reduced risk aversion and market optimism.
However, the upside for the Greenback remains limited as markets anticipate the Federal Reserve (Fed) might start its rate-cutting cycle in September.
Federal Reserve Chair Jerome Powell's forthcoming speech at the Jackson Hole Symposium and the release of the July FOMC meeting minutes are expected to provide further guidance on the Fed's policy trajectory.
Market sentiment currently reflects an 85.7% probability of a 25-basis point rate cut in September, up from previous expectations. This outlook could cap gains for the USD, even as it provides support to the USD/CAD pair against a weakening CAD.
Therefore, the recent decline in Crude Oil prices and anticipated Canadian inflation data are likely to strengthen the USD/CAD pair.
Meanwhile, the US dollar's modest recovery and expectations of Fed rate cuts are also influencing the USD/CAD pair, although further gains may be capped by the Fed's anticipated policy adjustments.
USD/CAD - Technical Analysis
USD/CAD is trading at $1.36189, holding steady with no significant movement. The pair is currently hovering near the pivot point at $1.3643, a critical level that could determine the next direction.
Immediate resistance is at $1.3679, with further resistance at $1.3710 and $1.3739. On the downside, key support levels to watch are $1.3603, followed by $1.3572 and $1.3544.
The Relative Strength Index (RSI) is at 23, indicating that the pair is in oversold territory, which could suggest a potential bounce or limited downside movement.
The 50-day Exponential Moving Average (EMA) is positioned at $1.3712, suggesting that the overall trend is bearish.
Given the current technical setup, USD/CAD appears to be under selling pressure, especially if it breaks below the $1.3643 pivot point.
A move below this level could trigger further downside toward the $1.3603 support and potentially lower.
However, if the pair manages to break above $1.3643, we could see a test of the immediate resistance at $1.3679.
Conclusion: The recommended strategy is to sell below $1.36430, with a target of $1.35837 and a stop loss at $1.36789.
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USD/CAD Price Analysis – Aug 13, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair continued its downward trend, trading around the 1.3735 level and reaching an intra-day low of 1.3727.
This bearish movement is due to the weakening US dollar, which has been pressured by market expectations of potential Federal Reserve interest rate cuts.
On the other hand, the decline in crude oil prices is putting downward pressure on the commodity-linked Canadian dollar, which is somewhat mitigating the overall decline of the USD/CAD pair.
US Dollar Weakness and Fed Rate Cut Expectations Impact USD/CAD
On the US front, the broad-based US dollar has continued to weaken, driven by the dovish stance of the Federal Reserve. This decline is largely due to market expectations of a potential 50 basis point interest rate cut by the Fed in September.
Meanwhile, the upcoming US inflation data, including the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Wednesday, are expected to show cooling inflation for July.
This could further support the Fed's potential easing of policy, contributing to the ongoing bearish trend in the dollar.
Therefore, the US dollar's ongoing weakness, driven by expectations of a 50 basis point rate cut and cooling inflation data, is putting downward pressure on the USD/CAD pair. This trend is exacerbated by the dovish Federal Reserve stance.
Impact of Falling Oil Prices and Bank of Canada Rate Cuts on the USD/CAD Pair
On the CAD front, the upticks in the USD/CAD pair might gain traction due to falling crude oil prices, which impact the Canadian dollar, a commodity-linked currency.
Canada’s largest export is crude oil, and the recent drop in West Texas Intermediate (WTI) oil prices to around $75.40 per barrel poses challenges for the CAD.
This decline is due to concerns about weaker demand and OPEC's reduced 2024 growth forecast for China, which continues to pressure the CAD.
Meanwhile, the Bank of Canada (BoC) is expected to cut interest rates by 25 basis points at both the September and October meetings, which could further weaken the Canadian dollar.
The combination of lower oil prices and potential rate cuts could fuel the CAD's strength, influencing the USD/CAD pair's movements.
USD/CAD - Technical Analysis
The USD/CAD pair is currently trading at $1.37326, down 0.02% on the 4-hour chart, showing a slight decline as it hovers just below the pivot point at $1.3748.
This level is crucial as it represents a potential turning point for the pair. If USD/CAD fails to break above this pivot, we might see further bearish movement.
The immediate resistance is at $1.3789, aligned with the 50-day Exponential Moving Average (EMA) at $1.3788. This area is a key resistance zone; a break above it could shift the momentum back to the bulls.
However, if the pair continues to trade below this resistance, the bearish outlook remains strong.
The next resistance levels are at $1.3841 and $1.3890, but these will only come into play if the pair manages to climb above $1.3789.
On the downside, immediate support is found at $1.3688, with further support levels at $1.3645 and $1.3603.
The Relative Strength Index (RSI) is at 41, suggesting there’s room for more downside before the pair becomes oversold.
Given the current technical setup, selling below $1.37475 with a target of $1.3688 and a stop loss at $1.37834 seems to be a sound strategy.
The market's inability to clear the 50-day EMA indicates that sellers are likely to maintain control in the short term.
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USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/CAD trades just below the key pivot point at $1.3748, signaling potential bearish momentum.
- Immediate resistance at $1.3789 aligns with the 50-day EMA; failure to break could confirm a downward trend.
- Support is at $1.3688; breaking this level may accelerate selling pressure.
The USD/CAD pair is currently trading at $1.37326, down 0.02% on the 4-hour chart, showing a slight decline as it hovers just below the pivot point at $1.3748.
This level is crucial as it represents a potential turning point for the pair. If USD/CAD fails to break above this pivot, we might see further bearish movement.
The immediate resistance is at $1.3789, aligned with the 50-day Exponential Moving Average (EMA) at $1.3788.
This area is a key resistance zone; a break above it could shift the momentum back to the bulls.
However, if the pair continues to trade below this resistance, the bearish outlook remains strong.
The next resistance levels are at $1.3841 and $1.3890, but these will only come into play if the pair manages to climb above $1.3789.
On the downside, immediate support is found at $1.3688, with further support levels at $1.3645 and $1.3603.
The Relative Strength Index (RSI) is at 41, suggesting there’s room for more downside before the pair becomes oversold.
Given the current technical setup, selling below $1.37475 with a target of $1.3688 and a stop loss at $1.37834 seems to be a sound strategy.
The market's inability to clear the 50-day EMA indicates that sellers are likely to maintain control in the short term.
USD/CAD - Trade Ideas
Entry Price – Sell Below 1.37475
Take Profit – 1.28008
Stop Loss – 1.27173
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$593/ -$359
Profit & Loss Per Mini Lot = +$59/ -$35
USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/CAD is trading at $1.38366, down 0.11%, just below the pivot point of $1.3859.
- RSI at 48 indicates a neutral market; the 50-day EMA suggests potential resistance at $1.3839.
- Buy below $1.38152 with a take-profit at $1.38811; stop-loss set at $1.37805 for risk management.
The USD/CAD pair is currently trading at $1.38366, down 0.11%, reflecting a mild bearish sentiment in the market.
The currency pair remains just below the pivot point at $1.3859, indicating a struggle to gain upward traction. Immediate resistance is situated at $1.3864, with further hurdles at $1.3908 and $1.3946.
Overcoming these resistance levels is crucial for the USD/CAD to shift back to a bullish trajectory.
On the support side, immediate levels are at $1.3781, followed by $1.3745 and $1.3706. These support levels are pivotal for traders looking to manage risk, as a fall below them could signal continued downward pressure.
The 50-day Exponential Moving Average (EMA) is at $1.3839, which is slightly above the current price and could act as a short-term resistance point.
This technical indicator highlights the cautious sentiment in the market, as traders await stronger signals to determine the next directional move.
The Relative Strength Index (RSI) is at 48, suggesting a neutral stance in the market. This balanced reading implies that the pair is neither overbought nor oversold, presenting an opportunity for traders to capitalize on potential breakout or breakdown scenarios.
Given the current setup, a strategic entry point would be to buy below $1.38152, with a take-profit target of $1.38811 and a stop-loss at $1.37805.
USD/CAD - Trade Ideas
Entry Price – Buy Below 1.38152
Take Profit – 1.38811
Stop Loss – 1.37805
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$659/ -$347
Profit & Loss Per Mini Lot = +$65/ -$34
USD/CAD Price Analysis – Aug 06, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair maintained its upward trend, remaining well-bid around the 1.3840 level and hitting an intra-day high of 1.3857.
This upward trend can be attributed to sliding crude oil prices, which undermine the Loonie and lend support amid a stronger USD. However, dovish Fed expectations and the risk-on mood might cap gains for the USD and the pair.
Meanwhile, the concerns about an economic downturn in China and softer US macro data suggest that the world's largest economy is slowing faster than initially expected.
This is likely to dent fuel demand and drag crude oil prices lower for the fourth straight day, which, in turn, undermines demand for the commodity-linked Loonie.
USD Gains and Fed Expectations Impacting USD/CAD Outlook
On the USD front, the broad-based US dollar (USD) gained traction due to increased demand and rising US Treasury bond yields, which supported the USD/CAD pair.
However, changes in global risk sentiment and expectations of a dovish Federal Reserve might limit further gains for the USD.
The market is currently anticipating a nearly 100% chance that the Fed will cut interest rates by 50 basis points in September.
This anticipation could cap further increases in US bond yields and the dollar, making USD/CAD bulls cautious unless significant economic news from the US or Canada emerges.
Impact of Oil Prices and Geopolitical Concerns on the USD/CAD Pair
On the other hand, worries about a potential economic downturn in China, combined with weaker-than-expected US economic data, have led to a decline in crude oil prices for the fourth consecutive day.
This drop in oil prices is also affecting the Canadian dollar (Loonie), which is closely tied to oil.
Meanwhile, ongoing concerns about a possible broader conflict in the Middle East could limit further declines in oil prices.
Given these factors, it is wise to wait for stronger signs of a rebound before expecting the USD/CAD pair to continue its recent upward trend.
Therefore, the decline in Crude Oil prices and concerns about China's economy and Middle East conflict are pressuring the Canadian dollar. This may limit the USD/CAD pair's upward momentum until conditions improve.
USD/CAD - Technical Analysis
The USD/CAD pair is currently trading at $1.38366, down 0.11%, reflecting a mild bearish sentiment in the market. The currency pair remains just below the pivot point at $1.3859, indicating a struggle to gain upward traction.
Immediate resistance is situated at $1.3864, with further hurdles at $1.3908 and $1.3946. Overcoming these resistance levels is crucial for the USD/CAD to shift back to a bullish trajectory.
On the support side, immediate levels are at $1.3781, followed by $1.3745 and $1.3706. These support levels are pivotal for traders looking to manage risk, as a fall below them could signal continued downward pressure.
The 50-day Exponential Moving Average (EMA) is at $1.3839, which is slightly above the current price and could act as a short-term resistance point.
This technical indicator highlights the cautious sentiment in the market, as traders await stronger signals to determine the next directional move.
The Relative Strength Index (RSI) is at 48, suggesting a neutral stance in the market. This balanced reading implies that the pair is neither overbought nor oversold, presenting an opportunity for traders to capitalize on potential breakout or breakdown scenarios.
Given the current setup, a strategic entry point would be to buy below $1.38152, with a take-profit target of $1.38811 and a stop-loss at $1.37805.
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USD/CAD Price Analysis – July 30, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair has failed to stop its downward trend and remained well-offered around the 1.3845 level, hitting the intra-day low of 1.3838.
However, this bearish trend can be attributed to the bearish US dollar, which lost ground on the back of cooling inflation that sparked discussions of the Fed implementing three rate cuts this year.
Meanwhile, the lower crude Oil prices exert downward pressure on the commodity-linked Canadian Dollar, limiting the downside of the USD/CAD pair.
US Dollar Weakness and Fed Rate Cut Expectations Impact USD/CAD
On the US front, the broad-based US dollar failed to halt its previous losses and remained bearish due to the dovish Fed stance. The Fed is expected to hold interest rates steady in its upcoming Wednesday meeting.
However, traders are forecasting a rate cut in September, with the CME FedWatch Tool showing a 100% probability of at least a 25 basis point reduction. Furthermore, the cooling inflation and easing labor market conditions in the US have heightened expectations for three rate cuts by the Fed this year.
On the data front, the US Personal Consumption Expenditures (PCE) Price Index increased by 2.5% year-over-year in June, slightly down from 2.6% in May, and in line with market expectations.
On a monthly basis, the PCE Index rose by 0.1% in June, following no change in May. Core PCE inflation, which excludes food and energy, also rose to 2.6% in June, matching the increase seen in May and surpassing the 2.5% forecast. Month-over-month, the core PCE Index climbed by 0.2% in June, up from 0.1% in May.
Therefore, the bearish US Dollar and expectations of a Fed rate cut in September, along with cooling inflation and easing labor market conditions, could put downward pressure on the USD/CAD pair.
Impact of Lower Crude Oil Prices on the USD/CAD Pair
On the other hand, gains in the USD/CAD pair may diminish as lower crude oil prices weigh on the commodity-linked Canadian dollar. Canada, the largest crude oil exporter to the US, is particularly affected by declining oil prices.
West Texas Intermediate (WTI) crude is trading around $75.40 per barrel, extending its losses for the third consecutive session.
This decline is driven by a weaker economic outlook in China and reduced supply concerns due to eased tensions in the Middle East. As a result, lower oil prices are limiting the upside potential of the USD/CAD pair by applying downward pressure on the Canadian dollar.
USD/CAD - Technical Analysis
USD/CAD is currently trading at $1.38452, reflecting a slight decline of 0.03%. The pivot point for this pair is set at $1.3819, a critical level that could determine the near-term direction. Immediate resistance is identified at $1.3866, followed by $1.3905 and $1.3946.
On the downside, immediate support is seen at $1.3781, with further support levels at $1.3745 and $1.3706.
The Relative Strength Index (RSI) is at 61, indicating a relatively strong bullish sentiment but approaching overbought conditions. This level suggests that while there is upward momentum, the pair could face selling pressure if it moves too much higher without consolidation.
The 50-day Exponential Moving Average (EMA) is positioned at $1.3780, which aligns closely with the immediate support level. This EMA serves as a significant indicator; a move below this could signal a shift to a bearish trend, whereas holding above it may reinforce bullish momentum.
Given the current technical landscape, a strategic entry point is recommended at $1.38190, targeting a take profit level of $1.38958. A stop loss should be set at $1.37792 to manage potential downside risks effectively.
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USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/CAD at $1.38452, pivot point at $1.3819.
- Immediate resistance at $1.3866; support at $1.3781.
- RSI at 61, 50-day EMA at $1.3780 indicating strong bullish sentiment.
USD/CAD is currently trading at $1.38452, reflecting a slight decline of 0.03%. The pivot point for this pair is set at $1.3819, a critical level that could determine the near-term direction. Immediate resistance is identified at $1.3866, followed by $1.3905 and $1.3946.
On the downside, immediate support is seen at $1.3781, with further support levels at $1.3745 and $1.3706.
The Relative Strength Index (RSI) is at 61, indicating a relatively strong bullish sentiment but approaching overbought conditions. This level suggests that while there is upward momentum, the pair could face selling pressure if it moves too much higher without consolidation.
The 50-day Exponential Moving Average (EMA) is positioned at $1.3780, which aligns closely with the immediate support level. This EMA serves as a significant indicator; a move below this could signal a shift to a bearish trend, whereas holding above it may reinforce bullish momentum.
Given the current technical landscape, a strategic entry point is recommended at $1.38190, targeting a take profit level of $1.38958. A stop loss should be set at $1.37792 to manage potential downside risks effectively.
USD/CAD - Trade Ideas
Entry Price – Buy Limit 1.38190
Take Profit – 1.38958
Stop Loss – 1.37792
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$768/ -$398
Profit & Loss Per Mini Lot = +$76/ -$39
USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance at $1.3791, next at $1.3822, and $1.3851.
- Immediate support at $1.3713, next at $1.3674, and $1.3631.
- RSI at 74, indicating overbought conditions.
The USD/CAD pair is trading at $1.37696, up 0.06% for the day. The 4-hour chart suggests a bullish trend, with the pivot point set at $1.3791. This level is crucial for determining the market's direction. If the price surpasses this pivot point, the bullish trend is likely to continue.
Immediate resistance is observed at $1.3791, followed by $1.3822 and $1.3851. These levels act as potential barriers to any upward movement. On the downside, immediate support is seen at $1.3713, with further support at $1.3674 and $1.3631, which could provide potential entry points for long positions if the price rebounds.
The Relative Strength Index (RSI) is at 74, indicating that USD/CAD is in overbought territory. This suggests that a correction could be imminent, although the overall trend remains bullish. The 50-day Exponential Moving Average (EMA) is at $1.3699, which supports the bullish outlook as long as the price remains above this level.
Given the technical indicators, the suggested trading strategy is to buy above $1.37556, with a take profit target at $1.37910 and a stop loss at $1.37275. This strategy aligns with the current bullish sentiment and key resistance and support levels.
In conclusion, USD/CAD's outlook remains bullish above the pivot point of $1.3791.
USD/CAD - Trade Ideas
Entry Price – Buy Above 1.37556
Take Profit – 1.37910
Stop Loss – 1.37275
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$354/ -$281
Profit & Loss Per Mini Lot = +$35/ -$28
USD/CAD Price Analysis – July 23, 2024
Daily Price Outlook
Despite a bearish US dollar and dovish Federal Reserve (Fed) expectations, the USD/CAD currency pair has continued its upward trend, trading around the 1.3763 level and reaching an intra-day high of 1.3773.
This upward movement is largely attributed to the recent slump in crude oil prices, which weakens the commodity-linked Canadian dollar and supports the USD/CAD pair. Conversely, selling pressure on the US dollar, driven by expectations of a possible Fed interest rate cut in September, has capped further gains in the USD/CAD pair.
Effects of Anticipated Fed Rate Cuts and Lower Treasury Yields on the USD/CAD Pair
On the US front, the broad-based US dollar has weakened recently due to expectations that the Federal Reserve will soon cut interest rates. Investors believe the Fed may start reducing rates in September, with possible additional cuts later in the year.
This has led to lower US Treasury bond yields, making bonds less attractive and putting pressure on the dollar.
The weaker US dollar, driven by anticipated Fed rate cuts and lower Treasury yields, has supported the USD/CAD pair, pushing it higher as the Canadian dollar weakens from falling oil prices.
Impact of Falling Crude Oil Prices on the USD/CAD Pair
On the other side, the recent drop in crude oil prices to a one-month low has weakened the Canadian dollar, benefiting the USD/CAD pair.
Oil prices were flat on Tuesday after a European Central Bank official suggested a possible rate cut in September, which offset some pressure from renewed hopes for a ceasefire in the Gaza conflict.
Therefore, the decline in oil prices over the previous sessions has further supported the USD/CAD pair by reducing the strength of the commodity-linked Loonie.
USD/CAD - Technical Analysis
The USD/CAD pair is trading at $1.37696, up 0.06% for the day. The 4-hour chart suggests a bullish trend, with the pivot point set at $1.3791. This level is crucial for determining the market's direction. If the price surpasses this pivot point, the bullish trend is likely to continue.
Immediate resistance is observed at $1.3791, followed by $1.3822 and $1.3851. These levels act as potential barriers to any upward movement. On the downside, immediate support is seen at $1.3713, with further support at $1.3674 and $1.3631, which could provide potential entry points for long positions if the price rebounds.
The Relative Strength Index (RSI) is at 74, indicating that USD/CAD is in overbought territory. This suggests that a correction could be imminent, although the overall trend remains bullish. The 50-day Exponential Moving Average (EMA) is at $1.3699, which supports the bullish outlook as long as the price remains above this level.
Given the technical indicators, the suggested trading strategy is to buy above $1.37556, with a take profit target at $1.37910 and a stop loss at $1.37275. This strategy aligns with the current bullish sentiment and key resistance and support levels.
In conclusion, USD/CAD's outlook remains bullish above the pivot point of $1.3791.
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USD/CAD Price Analysis – July 16, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair maintained its upward trend, holding strong around the 1.3685 level and reaching an intraday high of 1.3695.
The rally can be attributed to a bullish US dollar, bolstered by recent developments including an unsuccessful attempt on Donald Trump's life, which has bolstered his prospects for the 2024 presidential election, raising expectations of reduced regulations under his potential leadership.
Additionally, declining oil prices have weighed on the commodity-linked Canadian Dollar (CAD), further contributing to gains in the USD/CAD pair.
Impact of WTI Oil Price Decline and Chinese Economic Slowdown on USD/CAD Pair
On the other hand, West Texas Intermediate (WTI) oil prices have been declining for three consecutive sessions, currently trading around $80.30 per barrel. This drop is linked to a slowdown in the Chinese economy, reducing demand from the world's largest oil importer.
China's GDP grew 4.7% year-over-year in the second quarter, down from 5.3% in the first quarter and below expectations of 5.1%. The National Bureau of Statistics (NBS) noted stable economic operation in the first half of the year with a 5.0% growth rate.
Traders are now focused on Canada's upcoming Consumer Price Index (CPI) inflation data, crucial for the Bank of Canada's (BoC) decision on potential further rate cuts post a recent quarter-point reduction in June.
Therefore, the decline in WTI oil prices, driven by China's economic slowdown, may strengthen the USD/CAD pair due to reduced demand for the Canadian Dollar and expectations around the Bank of Canada's policy response to inflation data.
Impact of US Dollar Strength and Fed's Policy on USD/CAD Pair
On the US front, the US dollar gained strength due to recent events, including an unsuccessful attempt on Donald Trump's life, boosting his prospects for the 2024 presidential election and sparking hopes of reduced regulations under his potential leadership.
Additionally, expectations of higher government debt and inflation under Trump's policies further bolstered the dollar. This bullish sentiment strengthened the US dollar against the Australian dollar (AUD/USD), driving the pair lower amid increased risk aversion and dollar demand.
Meanwhile, Federal Reserve Chair Jerome Powell's dovish comments on inflation, indicating confidence in reaching the Fed's target sustainably, raised expectations of potential interest rate cuts, which initially capped gains in the US dollar against the CAD.
Meanwhile, Fed Bank of San Francisco President Mary Daly noted a cooling inflation trend, suggesting the Fed is on track toward its 2% target and emphasizing the need for more data before deciding on interest rates. Market sentiment now indicates an 85.7% probability of a 25-basis point rate cut in September, up from 71.0% last week.
Therefore, the US dollar's strength, fueled by events boosting Trump's election prospects and expectations of higher debt and inflation, likely strengthens against the Canadian dollar (USD/CAD) amid increased risk aversion and anticipations of Fed interest rate cuts.
USD/CAD - Technical Analysis
The USD/CAD pair is currently trading at $1.36888, showing negligible movement from the previous session. The 4-hour chart delineates significant price levels, with the pivot point situated at $1.3692. Immediate resistance is noted at $1.3720, followed by $1.3756 and $1.3782. On the downside, immediate support lies at $1.3672, with further support levels at $1.3653 and $1.3629.
The Relative Strength Index (RSI) is positioned at 65, indicating the pair is approaching overbought conditions.
This suggests potential caution for traders as the pair nears resistance levels. The 50-day Exponential Moving Average (EMA) is recorded at $1.3634, which acts as a critical support level, indicating the overall bullish trend remains intact if the price stays above this mark.
The recent stability in the USD/CAD can be attributed to mixed economic signals from both the U.S. and Canada. While the U.S. economy shows robust performance, bolstered by positive economic indicators and speculation about future rate hikes, the Canadian dollar is supported by strong commodity prices, particularly oil, which is a significant export for Canada.
Traders considering positions in the USD/CAD pair should look to buy above $1.36783, with a take-profit target at $1.37133 and a stop-loss set at $1.36591. This strategy leverages the current bullish sentiment while protecting against potential downside risks.
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