During the early hours of the day, the USD/CAD pair appeared to extend the previous day’s downtrend. However, the bears couldn’t take the slump rally beyond 1.3135 level. From there, the bulls took charge of further price actions, allowing the pair to breach above the 50-day near-term SMA slightly. Also, in the Asian session, the RSI seemed to elevate from 40 level to 56.72 level, showing rising buyer interest.
Significant Economic Events
The primary focus of the market remains over the Fed rate cut decision scheduled at around 18:00 GMT. Fed Chair Jerome Powell had signaled for an ease in the monetary policy.
Quite notably, the US Consumer prices went up by 1.5% in the last 12 months period. Thereby, the inflation benchmark remain within the Fed’s 2% target rate. On the contrary, inflationary pressures had stood well higher before rate cuts in 1995, 1998, and 2007.
Another point of interest for the traders would remain on the July ADP Employment Change and Chicago Purchasing Managers’ Index data releases. The Street analysts expect higher statistics for both the events compared to its respective previous figures.
After long days, the economic calendar has some CAD-specific events in the docket. Today, at around 12:30 GMT, the market expects the Canadian May MoM GDP to record 0.1% over the last 0.3%. In the same timeframe, the June MoM Industrial Product Price and Raw Material Price Index will come out.
On the Crude Oil front, the data release of EIA Crude Oil Stocks Change computed since July 26 might attempt to tweak pair’s daily price actions. This time, the consensus expects the data to record near -1.818 million over the last -10.835 million.
On the Weekly Chart, the Loonie pair was underway recovery. As the pair moves further upside, it might hit stop at 38.2% Fibo retracement level or 1.3226 level. Before that, the pair must also tackle the robust resistance handle stemmed near 1.3225 mark.
Even if the pair makes a triumphant march, breaking all the aforementioned upside barriers, then the 1.3348 resistance would get activated. Nevertheless, the pair remains entirely secured on the downside, protected by a stable 2-year old slanting ascending support line.
The USD/CAD had already broken a substantial counter trendline on July 22 and had sustained a positive performance, taking rests at an 11-day old slanting support line. Anyhow, the pair breached the aforementioned support handle on July 30 and was underway downtrend. However, the 50-day SMA ensured to give additional support to the tumbling Loonie pair. The RSI was indicating 44.61 levels, revealing moderate buying.
This article was originally posted on FX Empire