- The price in USD / CAD falls and closes the week in red after Powell’s speech.
- The economic data for the United States is better than that for Canada. Still, the couple falls.
- Crude oil price recovery is also weighing on the pair.
- The daily chart trend line is crucial for the pair to find a break or a reversal.
The USD / CAD pair’s weekly forecast is bearish as the US dollar lags behind Powell’s speech. The couple may find directional bias on Friday in releasing the U.S. NFP report.
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In a shift from last week’s new annual highs, the USD / CAD pair fell below critical support levels. However, based on fundamental and technical factors that have led to the recent decline in the pair since the highs set in August, the USD / CAD remains the support limit on the trend line at the moment.
While U.S. economic data has been more optimistic than Canadian data in recent months, the slightly more restrictive tone of the July FOMC minutes that supported the strengthening US dollar has faded.
As the dollar lost its gains, the Canadian dollar, which benefited from the rise in the price of crude, gained momentum, causing the USD / CAD pair to fall as bears pushed prices down. to lows near 1.2600.
Key data from Canada from August 30 to September 3
The economic calendar is clear next week. Canada’s monthly GDP figures may provide some stimulus to the market. The rest of the events have little impact.
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Key US data between August 30 and September 3
The most important event next week at the U.S. FNP, which is expected to shrink to 750,000, just as expected to 943,000 jobs created in July. The ADP’s non-agricultural employment figures are expected to rise to 650,000 compared to July’s 330,000. Next week ISM PMIs are also expected to be produced for manufacturing and services, which may provide some boost to the market.
Weekly technical analysis in USD / CAD: the trend line for acting decisively
The USD / CAD pair fell sharply on Friday. However, the price stopped the bear’s decline near the 20-day SMA. At the same place, we can see 200-day SMA and the uptrend line support. Support on the trend line could be decisive. We may see an investment from here or a break. However, the chances of a break are lower than the investment, as the strength of the greenback may return even as a correction rather than a bullish investment. Another reason is the confluence of support that can cause bears to stop here. On the plus side, 1.2700 may be the target for the bulls, while 1.2550 is the target for the bears.
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