The long weekend in the United States did the US dollar some good, as the currency has registered broad gains in Tuesday trade. In the North American session, USD/CAD is trading at 1.3182, up 0.62%. If the pair can maintain these gains, it would mark its best one-day showing since mid-June.
There are no Canadian events on Tuesday, and with US releases limited to tier-2 data, investors are already casting an eye to Wednesday’s events. The highlight will be the Bank of Canada policy meeting. The bank slashed interest rates from 0.75% to 0.25% in March, in order to stabilize the economy, which was hammered by the Covid-19 pandemic. Policymakers have held rates at this low level, although the economy continues to show signs of recovery after a difficult second quarter. The BoC is not expected to announce any new measures, so investors will be listening to what the bank has to say about the economic outlook.
Last week’s excellent employment numbers out of the United States have given the US dollar some momentum this week. Upcoming job data is expected to point higher, which could further boost USD/CAD. On Wednesday, JOLT Jobs Openings will be released. The indicator is expected to accelerate for a third straight month, from 5.89 million to 6.05 million. This will be followed by unemployment claims, which fell below the 1-million level last week, to 886 thousand. The weekly indicator is projected to drop to 838 thousand.
- 1.3240 is the first line of resistance. This is followed by resistance at 1.3317
- 1.3059 is providing support. Close by is the next support level of 1.3021, protecting the 1.30 level
- USD/CAD has broken above the 10-day MA, which is a bullish sign for the pair
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