The Canadian dollar ended the week quietly and the lack of activity has continued on Monday. In the North American session, USD/CAD is trading at 1.3177, unchanged on the day. There are no US or Canadian events on the schedule.
US dollar recovers
The Canadian dollar’s impressive streak is over. After posting weekly gains eight straight times, USD/CAD finally managed a winning week. The pair gained 0.88% on the week, as the US dollar rebounded against most of the major currencies. After weeks of acting as a punching bag for its rivals, the big question is whether last week’s gains reflect a turnaround for the greenback, or will it resort to its losing ways. The fortunes of the US dollar are closely tied to the extent of the US recovery. US releases have been mixed, although the economy has shown signs of recovery. Investors will be keeping a close eye on the Federal Reserve on Wednesday, as the US central bank releases the minutes of its most recent meeting. If Fed policymakers sound bullish on the recovery, the US dollar could gain ground.
Canada Manufacturing Sales eyed
Canada releases manufacturing sales on Tuesday, and the indicator has looked strong, with back-to-back gains in the double-digit range. This points to renewed strength in the manufacturing sector, after plunging 28.5% in May. Another gain in the July release would be bullish for the Canadian dollar.
- There is resistance at 1.3210, followed by resistance at 1.3238
- 1.3153 is a weak line of support. Below, there is support at 1.3124
- The 20-day MA remains relevant and is situated just below the pair. If the pair breaks below this line, it would be an indication of a downward trend
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