The USDCAD is currently trading below the mid-1.3500s due to the decline in value of the USD.

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• USD/CAD trades below the mid-1.3500s amid the weakening of the USD.

The pair currently trades last at 1.35446.

The previous day high was 1.3575 while the previous day low was 1.3524. The daily 38.2% Fib levels comes at 1.3556, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3544, expected to provide support.

The USD/CAD pair faces some follow-through selling in the early Asian session on Tuesday. The major pair currently trades near 1.3542, losing 0.01% on the day. In the meantime, the US Dollar (USD) loses momentum and trades sideways around 103.30. Investors await Thursday’s Jackson Hole Economic Symposium for fresh impetus.

The stronger US Retail Sales and robust labor data strengthen the case for another interest rate rise by the Federal Reserve (Fed). FOMC Minutes emphasized last week that inflation remained unacceptably high and additional monetary policy tightening may be required to bring inflation to the target. Investors raise their bet that Federal Reserve (Fed) will prolong the tightening cycle, which boosts the US 10-year Treasury bond yields to 4.342%. The Fed’s Jackson Hole conference will be in the spotlight this week. A hawkish tone from Fed Chairman Jerome Powell might lift the US Dollar (USD). Market participants are placing bets on a 40% likelihood of a last Fed rise by November, according to Reuters.

On the Canadian Dollar front, a decline in oil prices undermines the Canadian Dollar since Canada is the largest oil exporter to the United States. Furthermore, Canada’s 5-year yield increased to 4.143%, over a decade high. Markets believe that the Bank of Canada (BoC) would maintain current interest rate policies for a longer period. It’s worth noting that BoC raised its interest rate by 25 basis points (bps) to 5% in its July meeting.

Market participants await the monthly Canadian Retail Sales for June due on Wednesday. On the US docket, US Existing Home Sales, S&P Global PMIs, Initial Jobless Claims, and Durable Good Orders will be released later this week. The key event will be Fed Chair Jerome Powell’s speech on Friday and it will be critical for determining a clear movement for the USD/CAD pair.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3543 at the time of writing. Pair opened at 1.3552 and is trading with a change of -0.07 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3363, 50 SMA 1.3282, 100 SMA @ 1.3385 and 200 SMA @ 1.3453.

The previous day high was 1.3575 while the previous day low was 1.3524. The daily 38.2% Fib levels comes at 1.3556, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3544, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3526, 1.35, 1.3476
• Pivot resistance is noted at 1.3577, 1.3601, 1.3627

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