The USDCAD currency pair is forming a new uptrend.
The U.S. dollar has risen for six consecutive weeks as traders await a speech by the U.S. Federal Reserve Chair at a central bank symposium in Jackson Hole.
On Wednesday, the American currency as well as 10-year and 30-year U.S. Treasury bond yields fell sharply. The decline was due to investors' reaction to the latest business activity index report.
On Thursday, the majority of market participants remained cautious ahead of today's speech by U.S. Central Bank Governor Jerome Powell. Investors and traders will closely monitor Powell’s signals on further monetary policy.
Most analysts forecast that the Fed will raise rates by 0.25% one more time this year. This assumption has already been largely taken into account by the market.
In addition, traders hope to get clarity on how long the U.S. central bank will keep tightening monetary policy. Currently, the uncertainty in this matter is still high.
The release of Canada Core Retail Sales this week showed a decline to -0.8% from the previous level of -0.3% month-on-month. This may indicate a drop in consumer demand and a possible slowdown in economic activity. Such statistics put pressure on the Canadian dollar, indicating a weaker state of the country's economy.
USDCAD quotes broke out of the descending correctional channel on the daily timeframe.
The price is forming an upward correction trend on the H1 timeframe. Currently, the quotes are midway between the ascending support and resistance lines. Today's strong news background may increase volatility and create conditions for additional buying positions.
The best entry point to buy is in the range of 1.3545-1.3565, near the local upward support, which has repeatedly confirmed its significance.
The short-term outlook for USDCAD suggests buying in the range of 1.3545–1.3565.
The target is at the level of 1.3655.
Part of the profit should be taken near 1.3600.
The Stop-loss is set at 1.3525.
Bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.