USD/CAD: Bullish Trend
Yuri Papshev | Jun 09, 2020 07:33AM ET
Friday's US non-farm payrolls report showed an unexpected increase in the number of jobs in May, which strengthens the positive outlook for the US dollar, which may benefit from a pickup in growth in the wider US economy, in the context of the global recession and the possibility of new shocks in financial markets.
The dollar can also act as a safe-haven in the face of continuing uncertainty over the coronavirus pandemic (the relaxation of restrictions imposed to contain the disease poses a threat to the second wave of infections), as well as tensions between the United States and China.
After USD/CAD reached a local 20-year high near 1.4668 in mid-March, the pair subsequently plummeted, trading near 1.3450 at the beginning of today's European session (through this mark, the Fibonacci level 23.6% of the downward correction in the USD/CAD growth wave from 0.9700 to 1.4600 mark is passing), about 100 pips above the 3-month low reached on Monday.
A break into the zone above key resistance levels 1.3590 (ЕМА200 on the daily chart), 1.3680 (ЕМА144 on the daily chart) will create the prerequisites for the restoration of the bullish trend of USD / CAD.
At the same time, participants in financial markets will be waiting for the publication on Wednesday (at 18:00 GMT) of the Fed's decision on rates and comments by the monetary policy committee regarding further plans for its monetary policy. So far, judging by the latest statements and actions by the Fed leadership, there remains a tendency to soft politics and further stimulate the US economy, and this is a negative factor for the USD.
Support Levels: 1.3357, 1.3250, 1.3090
Resistance Levels: 1.3450, 1.3525, 1.3555, 1.3590, 1.3680, 1.3725, 1.3900
Sell Stop 1.3350. Stop-Loss 1.3510. Take-Profit 1.3300, 1.3250, 1.3090
Buy Stop 1.3510. Stop-Loss 1.3350. Take-Profit 1.3525, 1.3555, 1.3590, 1.3680, 1.3725, 1.3900
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