USDCAD Forex Forecast – Aiming for Channel Top!

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USDCAD Forex Forecast - Aiming for Channel Top!
USDCAD is still trending higher, moving inside the ascending channel on its 4-hour time frame. Price just bounced off support and could be due for another test of resistance once it moves past the mid-channel area of interest.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, the moving averages line up with the bottom of the channel, adding to its strength as a support area. However, stochastic is already in the overbought zone, which suggests that buying pressure could weaken.
A selloff could find support at the channel support at the 1.3050-1.3100 levels while a continuation of the climb past the 1.3200 mark could take price up to the 1.3375-1.3400 levels. A break below the channel support, however, could indicate a reversal from the uptrend.
Jobs data from Canada came in weaker than expected on Friday, as the economy lost 31.2K jobs in July versus the projected 10.2K gain. This was also worse than the previous 0.7K drop in employment for June. The unemployment rate climbed from 6.8% to 6.9% as expected.
Meanwhile, the US NFP report beat expectations with a 255K gain in hiring for July versus the projected 180K gain. Apart from that, the previous reading was upgraded from 287K to 292K. However, the unemployment rate held steady at 4.9% versus the projected 4.8% figure.
There are no major reports out of the US today while Canada has the building permits report only. Crude oil prices could continue to influence Loonie price action while the US dollar could take its cue from market sentiment.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.