USD/CAD had been quite volatile until it breached above 1.3050 with a daily close. The price is currently retracing to retest the resistance as support. USD has been quite impulsive with the recent gains which lead CAD to lose some grounds in the process despite better-than-expected economic reports.
Recently, Canada’s Employment Change report was published with a significant increase to 54.1k from the previous figure of 31.8k which was expected to decrease to 17.0k and Unemployment Rate also decreased to 5.8% from the previous value of 6.0% which was expected to be at 5.9%. The positive economic report helped CAD to strengthen for a certain period but CAD could not extend it further. This week on Thursday, Canada’s Manufacturing Sales report is going to be published which previously was at 1.4% and ADP Non-Farm Employment Change report which previously was at -10.5k. Both economic reports are expected to reveal positive results. Moreover, on Friday, CAD CPI report is going to be published which previously was at 0.1% and this time a certain increase is expected as well.
On the other hand, today US NFIB Small Business Index report is going to be published which is expected to decrease marginally to 106.9 from the previous figure of 107.2 and Import Price is expected to increase to 0.1% from the previous value of -0.4%. Additionally, tomorrow US Retail Sales report is going to be published which is expected to decrease to 0.2% from the previous value of 0.5% and Core Retail Sales is expected to be unchanged at 0.4%.
Meanwhile, certain volatility is expected in this pair as high impact economic reports from both Canada and the US are due in the coming days of the week. If CAD performs well with the economic reports, then further bearish momentum will go on in this pair. Otherwise, USD has higher chances to advance in the short term.
Now let us look at the technical chart. As the price broke above 1.3050 area with a daily close, the previous momentum below 1.3050 is currently being assumed as false break momentum. Currently, the price is going to retrace towards 1.3050 area for a retest before pushing higher towards 1.3300 resistance area in the coming days. As the price remains above 1.2950 area, the bullish bias is expected to continue further.
SUPPORT: 1.3050, 1.2950
The material has been provided by InstaForex Company – www.instaforex.com