USD/CAD: IN ANTICIPATION OF THE PUBLICATION OF REPORTS ON THE US AND CANADIAN LABOR MARKETS
Scenario Timeframe Intraday Recommendation BUY STOP Entry Point 1.3765 Take Profit 1.3845 Stop Loss 1.3720 Key Levels 1.3650, 1.3675, 1.3700, 1.3733, 1.3762, 1.3800, 1.3845, 1.3900
Alternative scenario Recommendation SELL STOP Entry Point 1.3730 Take Profit 1.3675 Stop Loss 1.3762 Key Levels 1.3650, 1.3675, 1.3700, 1.3733, 1.3762, 1.3800, 1.3845, 1.3900
Current trend
The USD/CAD pair is showing moderate growth, testing 1.3750 for a breakout and updating local highs from June 18. Activity on the instrument remains quite high, despite the fact that the macroeconomic background from the United States does not allow the quotes of the national currency to develop a more rapid upward trend.
Statistics on the Personal Consumption Expenditures - Price Index justified analysts’ forecasts, so the market reaction turned out to be restrained: at the end of May, the Core PCE decreased from 2.8% to 2.6% in annual terms and from 0.3% to 0.1% — on a monthly basis, while the CPE adjusted from 2.7% to 2.6% and from 0.3% to 0.0%, respectively. These data did not lead to a reassessment of the likelihood of an interest rate cut by the US Federal Reserve. It is likely that a local driver that could influence the regulator’s decision could be the June labor market report, which will be presented at the end of this week. Among other things, traders expect a slowdown in Nonfarm Payrolls from 272.0 thousand to 195.0 thousand, the Average Hourly Earnings could decrease from 4.1% to 3.9% in annual terms and from 0.4% to 0.3% on a monthly basis, and the Unemployment Rate is likely to remain at 4.0%. Tomorrow, the minutes of the June meeting of the American regulator will be published, which will help clarify the sentiments of members of the US Federal Open Market Committee (FOMC) regarding the prospects for reducing borrowing costs: analysts are now counting on the first interest rate cut by 25 basis points in September.
A report on the Canadian labor market will also be presented on Friday: forecasts suggest a moderate slowdown in Employment Change in June from 26.7 thousand to 22.5 thousand, the Unemployment Rate may increase from 6.2% to 6.3%, and the Average Hourly Wages — amount to 5.0-5.2%.
Support and resistance
On the D1 chart Bollinger Bands are trying to reverse horizontally. The price range remains virtually unchanged, limiting the potential for the development of an ultra-short-term uptrend. MACD is growing, maintaining an uncertain buy signal, located above the signal line and trying to consolidate above the zero level. Stochastic is currently approaching its highs, indicating the risks of overbought US currency in the ultra-short term.
Resistance levels: 1.3762, 1.3800, 1.3845, 1.3900.
Support levels: 1.3733, 1.3700, 1.3675, 1.3650.
Trading tips
Long positions can be opened after a breakout of 1.3762 with the target of 1.3845. Stop-loss — 1.3720. Implementation time: 2-3 days.
A rebound from 1.3762 as from resistance, followed by a breakdown of 1.3733 may become a signal for opening of new short positions with the target at 1.3675. Stop-loss — 1.3762.
| Scenario | |
|---|---|
| Timeframe | Intraday |
| Recommendation | BUY STOP |
| Entry Point | 1.3765 |
| Take Profit | 1.3845 |
| Stop Loss | 1.3720 |
| Key Levels | 1.3650, 1.3675, 1.3700, 1.3733, 1.3762, 1.3800, 1.3845, 1.3900 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 1.3730 |
| Take Profit | 1.3675 |
| Stop Loss | 1.3762 |
| Key Levels | 1.3650, 1.3675, 1.3700, 1.3733, 1.3762, 1.3800, 1.3845, 1.3900 |
Current trend
The USD/CAD pair is showing moderate growth, testing 1.3750 for a breakout and updating local highs from June 18. Activity on the instrument remains quite high, despite the fact that the macroeconomic background from the United States does not allow the quotes of the national currency to develop a more rapid upward trend.
Statistics on the Personal Consumption Expenditures - Price Index justified analysts’ forecasts, so the market reaction turned out to be restrained: at the end of May, the Core PCE decreased from 2.8% to 2.6% in annual terms and from 0.3% to 0.1% — on a monthly basis, while the CPE adjusted from 2.7% to 2.6% and from 0.3% to 0.0%, respectively. These data did not lead to a reassessment of the likelihood of an interest rate cut by the US Federal Reserve. It is likely that a local driver that could influence the regulator’s decision could be the June labor market report, which will be presented at the end of this week. Among other things, traders expect a slowdown in Nonfarm Payrolls from 272.0 thousand to 195.0 thousand, the Average Hourly Earnings could decrease from 4.1% to 3.9% in annual terms and from 0.4% to 0.3% on a monthly basis, and the Unemployment Rate is likely to remain at 4.0%. Tomorrow, the minutes of the June meeting of the American regulator will be published, which will help clarify the sentiments of members of the US Federal Open Market Committee (FOMC) regarding the prospects for reducing borrowing costs: analysts are now counting on the first interest rate cut by 25 basis points in September.
A report on the Canadian labor market will also be presented on Friday: forecasts suggest a moderate slowdown in Employment Change in June from 26.7 thousand to 22.5 thousand, the Unemployment Rate may increase from 6.2% to 6.3%, and the Average Hourly Wages — amount to 5.0-5.2%.
Support and resistance
On the D1 chart Bollinger Bands are trying to reverse horizontally. The price range remains virtually unchanged, limiting the potential for the development of an ultra-short-term uptrend. MACD is growing, maintaining an uncertain buy signal, located above the signal line and trying to consolidate above the zero level. Stochastic is currently approaching its highs, indicating the risks of overbought US currency in the ultra-short term.
Resistance levels: 1.3762, 1.3800, 1.3845, 1.3900.
Support levels: 1.3733, 1.3700, 1.3675, 1.3650.
Trading tips
Long positions can be opened after a breakout of 1.3762 with the target of 1.3845. Stop-loss — 1.3720. Implementation time: 2-3 days.
A rebound from 1.3762 as from resistance, followed by a breakdown of 1.3733 may become a signal for opening of new short positions with the target at 1.3675. Stop-loss — 1.3762.
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