In Asian trading on Wednesday, USD/CAD maintains its upward trend and is approaching the important resistance at 1.3900.
There is low activity in the market, as today investors are waiting for the Fed's interest rate decision and Jerome Powell's press conference. On Friday, the US labor market report will be published, which can also change the positioning of trading instruments. Today the ADP employment statistics will be released. According to forecasts, the indicator will grow from 89.0 to 150.0 thousand
It is expected that the Fed will leave the rate at 5.5% but will note the possibility of another act of monetary restriction this year.
In addition, today will be the speech of the head of the Bank of Canada Tiff McLem. The Canadian regulator is expected to end the rate hike cycle if inflation does not move to strengthen again.
Today, Canada released GDP data for August, which showed zero growth with a forecast of 0.1% growth.
Technical analysis for USD/CAD for today
Daily chart patterns and technical indicators confirm the USD/CAD uptrend. The Bollinger indicator is confidently turned upward. MACD is growing in the positive range and keeps a buy signal. The Stochastic oscillator turned downward and came out of the overbought area, playing off the recent downward correction of the pair.
After consolidation above 1.3800 we open long positions with the expectation of reaching the target of 1.4000. We place a stop-loss at 1.3853.
In case of a rebound from 1.3900, we are waiting for a breakdown and consolidation of the price below 1.3853. The nearest target of sellers will be 1.3750. Stop-loss will be set at 1.3900.