News & Analysis
Eightcap Forex technical insights; USDCAD boosted by trade and employment data but technical pressure remains.
The last seven trading days (30th AUG – 7th SEP) have been mainly great for the USDCAD as continuing trade uncertainty has kept the CAD lower. U.S and Canadian officials have failed on the last two attempts to close a new trade deal. Friday’s non-farm employment data reversed a weaker day as the figure beat expectations coming in at 201K. This had a knock on effect re-sparking interest rate fears. Stocks and risk reversed, the USD rallied. Canadian employment data came in missing expectations giving two-way support to buyers. The USDCAD reversed a 32 pip decline to finish the session 23 pips higher. Price snapped a two-day losing streak which saw a decline of 46 pips. Before the weakness buyers rallied for 4 days straight adding 283 pips.
Fundamentals on the short to medium term do show buyer support, the momentum break on the daily chart is an example of this. As per the notes, a resistance area remains. Looking at price in further detail from the 4-hour chart (2nd chart below) we can see a clear trend break with a new lower high forming after the break. Buyers have range low support at 1.3110. Sellers look to have momentum at the current time and the onus is on buyers to hold support and break the lower high to show continued strength.
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