USD/CAD Price Analysis: Prepares for an impulsive move ahead of US/Canada Employment report
|- USD/CAD is oscillating in a tad wider range ahead of labor market reports.
- The market mood remains upbeat as investors shrug off volatility triggered by Fitch’s downgrade.
- USD/CAD reaches near the horizontal resistance plotted around 1.3387.
The USD/CAD pair rebounds after a modest corrective move to near 1.3330 in the London session. The Loonie asset is expected to remain sidelined as investors are awaiting the employment data of the United States and Canada.
US Unemployment Rate is seen steady at 3.6% while Canada’s jobless rate could increase to 5.5% vs. the former release of 5.4%. The US Dollar Index (DXY) manages to remain well supported above the immediate support of 102.40. Meanwhile, the market mood remains upbeat as investors shrug off volatility triggered by Fitch’s downgrade to the US government's long-term debt rating.
On Thursday, US Services PMI and its forward demand underperformed expectations as the burden of high inflation squeezes deep pockets of households. The labor cost index is growing at a slower pace, reducing the spending capacity of individuals.
After a vertical north-side move, the USD/CAD pair reaches near the horizontal resistance plotted from July 07 high around 1.3387 on a four-hour scale. Upward-sloping 20-period Exponential Moving Average (EMA) at 1.3322 indicates that the bullish bias is extremely solid.
The Relative Strength Index (RSI) (14) climbs into the bullish range of 60.00-80.00, which indicates that the upside momentum is already active.
A decisive break above the July 07 high around 1.3387 would open a fresh upside, which will drive the asset towards the June 7 high at 1.3427, followed by the psychological resistance of 1.3500.
In an alternate scenario, a downside move below July 18 high at 1.3288 would drag the asset toward July 27 low around 1.3160 and July 14 low marginally below 1.3100.
USD/CAD four-hour chart
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