#USDCAD @ 1.33729 has refreshed its three-week high at 1.3375 despite multiple headwinds.

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• USD/CAD has refreshed its three-week high at 1.3375 despite multiple headwinds.

The pair currently trades last at 1.33729.

The previous day high was 1.3373 while the previous day low was 1.3275. The daily 38.2% Fib levels comes at 1.3335, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3312, expected to provide support.

The USD/CAD pair has refreshed its three-week high at 1.3375 in the London session. The Loonie asset has registered a stellar rally despite sheer weakness in the US Dollar Index (DXY), higher oil prices, and expectations of one more interest rate hike from the Bank of Canada (BoC).

S&P500 futures have extended their downside journey in Europe, initiated on Thursday after the United States labor market turned out more resilient than expected. Market sentiment is bearish as investors are extremely cautious ahead of the second-quarter result season and labor market data.

The US Dollar Index (DXY) has found support near 103.00. The USD Index is expected to remain volatile ahead of the release of the Nonfarm Payrolls (NFP) data. Analysts at RBC Economics expect the US jobs report in June likely saw a 260K increase in payroll employment, down from the +339K in May, but still at a high level. We expect the Unemployment Rate likely edge up to 3.8% (calculated separately from the household survey), from 3.7% in May.

Like the US Dollar, the Canadian Dollar will also react heavily to its domestic employment data. Analysts at NBF believe after a slight hiccup in May, we expect job creation to have resumed in June. But an expected gain of 20K may not be enough to prevent a further rise in the unemployment rate in a context where the labor force is growing at a strong pace. Indeed, we expect the jobless rate to increase from 5.2% to 5.3%, assuming that the participation rate rises by a tenth to 65.6%.

A poll from Reuters showed that the Bank of Canada (BoC) will hike interest rates by 25 basis points (bps) to 5% in July. This would be the last nail in the coffin and after that, the monetary policy would remain stable for a longer period.

On the oil front, oil prices have printed a fresh two-week high at $72.35 despite global central banks preparing for a fresh rate hike cycle. It is worth noting that Canada is the largest exporter of oil to the United States and higher oil prices support the Canadian Dollar.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3377 at the time of writing. Pair opened at 1.3368 and is trading with a change of 0.07 % .

The pair is trading above its 20 Daily moving average @ 1.3247, below its 50 Daily moving average @ 1.3397 , below its 100 Daily moving average @ 1.3491 and below its 200 Daily moving average @ 1.3506

The previous day high was 1.3373 while the previous day low was 1.3275. The daily 38.2% Fib levels comes at 1.3335, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3312, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3304, 1.3241, 1.3207
• Pivot resistance is noted at 1.3402, 1.3436, 1.3499

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