USD/CAD Daily Forecast – Fundamentals Pleasing the Bulls

After bouncing off from the pivotal 1.3037 support point yesterday, the USD/CAD pair continued to remain seesawed until today. The pair started Friday’s session near 1.3046 level with the bulls taking control over the helm. While on the upper side, the healthy 1.3066 resistance handle remained as the major barrier to cap the daily gains. However, the resilient act displayed in the early hours might act as a prelude to some rigorous movements for the day.

Meantime, the prices of Crude Oil, Canada’s largest export item, fell 1% today on fears for the global economy. The elevated Middle East tensions and uncertainty on the US-Sino trade front, stood as the main concerns, threatening the overall economic growth.

Significant Economic Events

Today, the next session after the US Independence Day, the economic docket appeared filled with some crucial June data releases. The Non-Farm Payrolls and the YoY Average Hourly Earnings are something that needs special attention. This time, the Street analysts stay highly bullish over both these reports. In the Asian session, the USD Index was already 0.08% up since the last closing, revealing buyer interests.

On the Canadian side, traders must keep a closer watch over the Canadian June Employment and Unemployment Change data releases. The market expects the change the Employment to report 17.7K lower than the previous 27.7K. Also, the consensus estimates the Unemployment rate to grow 0.1% over the last 5.4%. The market also expects a drop of 1.64% in the June Ivey Purchasing Managers Index, this time.

In a nutshell, the Fundamentals seem appealing to the USD/CAD bulls. Hence, traders can expect some immediate advances in the price actions following each significant data release.

Technical Analysis

2-Hour Chart

For the USD/CAD pair to make a positive move, it needs to overcome multiple barriers on the upward path. The slanting 15-day old descending resistance line, along with the 50-day and 100-day SMA confluence have confined the pair’s northward movements. In case, if the Loonie pair manages to break this strong resistance confluence, then the significant 200-day SMA at 1.3210 level would get activated. On the flip side, support lines near 1.3060 and 1.3041 levels kept the pair’s downside limited.

1-Week Chart

On a broader view, the bears seem to take over the game. During the last 1-year period, the downside price actions of the pair were taken care of by a slant ascending support line. However, in the mid-June of 2019, the aforementioned support benchmark was broken. In addition to that, the pair had also crossed below the significant 200-day SMA, signaling a sharp pullback in the coming sessions. If the drowning in the pair continues, then it will enable the bears to challenge the 1.2769 resistance-turned-support level.