The upward movement of the USDCAD price will continue

17 July 2023 237
The upward movement of the USDCAD price will continue

All last week until Friday, the USDCAD price was moving steadily downward. The price updated last September's low, falling below 1.31, but after that the bulls took the initiative, and Friday's trading session ended with a powerful rebound. The price returned above 1.32, and now there are good chances that the price will continue to rise to the level of 1.326.

 

The US dollar has been under pressure from the June inflation statistics for the last few days. But by the end of last week, it got some support. Consumer sentiment indexes from the University of Michigan showed strong growth, significantly exceeding expectations. Christopher Waller also made a contribution. He was the last Fed's official who gave a speech before a week of silence ahead of the July 26 meeting.

 

Waller said he was still not ready to call an all clear on US inflation. He also favored more rate rises this year. Waller added that the robust strength of the labor market and the solid overall performance of the US economy gives some room for further tightening of monetary policy. In addition to the July rate hike, Waller expects another +0.25% increase at one of the Fed's fall meetings.

 

In turn, the Canadian dollar rate now depends on June inflation data, which will arrive tomorrow. The overall rate is expected to fall from 3.4% to 3%, while the core rate of price growth could slow from 3.7% to 3.4%. If the figures are in line with the forecasts or show an even greater inflation slowdown, the Canadian dollar could decline significantly. In this case, the key rate hike by the Bank of Canada on July 12 is likely to be the last one, and the currency will no longer receive support from it.

 

Friday's candle on the USDCAD daily chart completely reversed Thursday's losses, which is an important sign of a change in the trend. The Stochastic indicator is also giving a buy signal. The nearest growth target for the USDCAD is the level of 1.326.

 


The following trading strategy can be suggested:

 

Buy the USDCAD at the current price. Take profit — 1.326. Stop loss — 1.319.

This content is for informational purposes only and is not intended to be investing advice.

error
More
Comments
New Popular
Send
Commenting rules