USD/CAD continues to drift close to the 1.34 level. In Tuesday’s North American session, the pair is trading at 1.3388, up 0.11% on the day.
Until recently, the US dollar has played the role of the G-10 punching bag, as the major currencies have had their way with the greenback. The Canadian dollar took full advantage, as USD/CAD posted five successive monthly declines from April-August, as the pair plunged 7.8 percent during that time. However, the US dollar has finally found its groove, boasting gains of 2.5% in September. Last week, USD/CAD punched above the 1.34 line for the first time since early August.
Will the USD dollar rally continue? There are two key events this week which could have a significant impact on the fortunes of USD/CAD. Canada releases GDP for July, with a projected gain of 2.9 percent. The past two GDP readings have been higher than the forecasts, and if this happens again in the upcoming release, the Canadian dollar could gain ground. The end of the week brings US Nonfarm Payrolls, one of the most important events on the economic calendar. The forecast stands at 900 thousand, and a reading wide of this mark could trigger volatility from USD/CAD at the end of the week.
- 1.3395 is providing weak resistance. The next resistance line is at 1.3426
- There is support at 1.3349, followed by support at 1.3326
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