Today, during the Asian session, the USD/CAD pair shows mixed trading dynamics, holding near local highs from July 28.
Market activity on Tuesday remains subdued, as investors expect the emergence of new drivers of movement in the market. In the meantime, the strong report on the US labor market published last Friday provides strong support for the instrument. The data in many respects turned out to be better than market expectations, which increased the chances that the US Federal Reserve will respond to the strengthening of the economy by reducing existing incentives.
The Canadian report, which was also presented on Friday, showed much more modest results, and therefore remained without attention. Thus, the July employment indicator showed an increase of only 94 thousand after an increase of 230.7 thousand last month. Analysts expected an increase of 177.5 thousand. At the same time, the unemployment rate still fell significantly from 7.8% to 7.5%, only slightly falling short of the expected values of 7.4%.
Support and resistance levels
On the daily chart, the Bollinger bands are moving flat within the forex forecast. The price range practically does not change, but it remains quite spacious for the current level of activity in the market. The MACD indicator is growing, maintaining a weak buy signal (the histogram is located above the signal line). Stochastic maintains a confident upward trend, but is rapidly approaching its maximum levels, signaling the risks of overbought US currency in the ultra-short term.
- Resistance levels: 1.2600, 1.2650, 1.2700, 1.2746.
- Support levels: 1.2554, 1.2500, 1.2439, 1.2400.
Trading Scenarios
Thus, USD/CAD forecast for the Canadian Dollar on August 11-12, 2021, long positions can be opened after the breakdown of the 1.2600 level up with the target of 1.2700. The stop loss is 1.2554. Implementation period: 2-3 days.
Short positions can be opened after a rebound from the 1.2600 level and a breakdown of the 1.2554 level down with a target of 1.2439. The stop loss is 1.2600.