The most active growth among the currency assets during the Asian session on Thursday shows USD/CAD. At the moment the pair is testing the resistance of 1.3160 and is aimed to update the local maximum of July 14.
The strengthening of the pair is supported by the growth of the U.S. dollar across the market and the decline in the cost of oil.
Speaking at the Jackson Hole Economic Symposium on August 26, Jerome Powell reiterated the Fed's intention to continue with aggressive monetary policy tightening until inflation returns to the 2% target. The Fed's speech cheered up dollar buyers and raised the likelihood of a 75 basis points FOMC rate hike in September to 74%.
At the same time the day before the data on the GDP dynamics came out in Canada. The index grew by 0.1% in monthly terms and by 3.3% in annual terms against the forecast of 4.4%.
Technical analysis for USD/CAD
The CCI and Bollinger Bands reversed up in favor of strengthening the pair.
The MACD indicator is increasing in the positive range and retains a strong buy signal.
Stochastic Oscillator is in the area of maximum values.
After a confident breakdown above the key resistance at 1.3200, we are opening long positions with Take Profit at 1.3300. We place a protective stop at 1.3150.
On a rebound from 1.3200, we expect price to consolidate below support at 1.3150. From here, let's enter into short positions with Take Profit at 1.3050. Stop-loss is set at 1.3200.