USD/CAD trades well inside Tuesday’s trading range around 1.3650 ahead of key US labor market data.
Investors have sidelined while awaiting clarity on the status of bilateral deals between the US and its trading partners.
US-Canada trade talks to resume as Canadian officials eliminates digital service tax.
The USD/CAD pair trades in a very tight range near 1.3650 during the Asian trading session on Wednesday. The Loonie trades consolidates as investors await the United States (US) Nonfarm Payrolls (NFP) data for June for fresh cues on the Federal Reserve’s (Fed) monetary policy outlook.
Ahead of the US NFP report release, investors will pay close attention to the ADP Employment Change data for June, which will be published at 12:15 GMT.
According to the CME FedWatch tool, the Fed is almost certain to cut interest rates in the September policy meeting after leaving them unchanged this month.
Additionally, uncertainty surrounding bilateral deals by the US with its trading partners ahead of the July 9 tariff deadline and the impact of President Donald Trump’s tax-cut bill has forced investors to stay on the sidelines.
Meanwhile, de-escalating trade tensions between the US and Canada are expected to strengthen the Canadian Dollar (CAD). White House economic adviser Kevin Hassett expressed confidence on Monday that trade talks with Canada will resume as the nation has rolled back digital service tax levied on US technology companies.
USD/CAD continues to face selling pressure at every attempt above the 20-day Exponential Moving Average (EMA), suggesting a “Sell on Rise” trend. The 14-day Relative Strength Index (RSI) oscillates near 40.00. A fresh bearish momentum would appear if the RSI breaks below that level.
Going forward, the asset could slide towards the psychological level of 1.3500 and the September 25 low of 1.3420 if it breaks below the June 16 low of 1.3540.
On the contrary, an upside move by the pair above the May 29 high of 1.3820 would open the door towards the May 21 high of 1.3920, followed by the May 15 high of 1.4000.
USD/CAD daily chart
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
