In our previously published analysis on 3rd Sept, we anticipated that USDCAD will be adapting to a dovish tone after breaking below our lower trend line to the bearish channel and also leaving the exponential moving average 200 above it. Somehow the exponential moving average 50 and 61.8% fibb level at 1.2531 provided strong support to US dollar against Canadian dollar and went for a hawkish pull back towards 1.2750. The bullish momentum was also limited and USDCAD failed to provide a bullish closing above 50% fibb retracement level and took a dovish reversal by taking an exit to the downside from our bullish channel one more time. For now USDCAD is stuck between the monthly and weekly pivot while hovering above exponential moving average 50 in daily and a daily support at 1.2570 is defending the gates for further losses to the US Dollar. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Today we have economic release of Canada jobs report for August, where the consensus expects a 67.5K increase in employment and a drop in unemployment from 7.5% to 7.3%. It would take the economy to within 250K of pre-pandemic employment. A meaningful CAD rally may be impossible in the middle of an election campaign, but if the data were to surprise on the upside, and change the market’s views around BoC rate hikes a bit, we could see USD/CAD run out of upward momentum and set up a Q4 drift lower. On the technical side, a breakout below the weekly pivot would confirm the bearish continuation of trend with its next target as 1.2450. On the bullish side we need a closing above 50% fibb level to draw the market towards its early highs at 1.29247.

USDCAD READY TO ENTERTAIN THE BEARS AGAIN

Sep 10 2021