USD/CAD Price Analysis: Remains choppy near 1.3700 ahead of US Employment data
|- USD/CAD remains sideways around 1.3700 as the focus shifts to US labor market data.
- The Canadian Dollar remains on the backfoot due to declining oil prices.
- USD/CAD delivers a breakout of an inverted H&S chart pattern formed, which warrants a bullish reversal.
The USD/CAD pair trades back and forth near the round-level resistance of 1.3700 in the European session. The Loonie asset struggles for a decisive move as investors await the United States Employment Change data for September, which will be published at 12:15 GMT.
As per the estimates, the US laborforce recorded fresh additions of 156K private payrolls, lower than 177K in August. The US Dollar Index (DXY) slips sharply after facing stiff barricades near a fresh 11-month high around 107.20.
While the USD Index is correcting, the USD/CAD pair is trading back and forth, which indicates a weak Canadian Dollar. The latter remains on the backfoot due to declining oil prices. It is worth noting that Canada is the leading exporter of oil to the United States and lower oil prices impact negatively on the Canadian Dollar.
USD/CAD delivers a breakout of an inverted Head and Shoulder chart pattern formed on the daily scale, which warrants a bullish reversal after a prolonged consolidation. The neckline of the aforementioned chart pattern was plotted from April 28 high at 1.3668. The 50-day Exponential Moving Average (EMA) at 1.3500 continues to provide a cushion to the US Dollar bulls.
The Relative Strength Index (RSI) (14) shifts into the bullish range of 60.00-80.00, which indicates an activation of the bullish impulse.
A decisive break above October 3 high at 1.3736 would expose the asset to March 24 high around 1.3800, followed by March 10 high at 1.3860.
In an alternate scenario, a breakdown below September 25 low around 1.3450 would drag the asset toward September 20 low near 1.3400. A further breakdown could expose the asset to six-week low near 1.3356.
USD/CAD daily chart
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