USD/CAD Forecast: Canadian dollar strengthens, markets eye US jobs report

USD/CAD has moved lower in the Tuesday session. In the North American session, the pair is trading at 1.3256, down 0.33% on the day. On the release front, there are no Canadian events until Thursday. In the U.S., JOLTS Jobs Openings is expected to slow to 6.84 million. On Wednesday, the U.S. releases CPI reports.

The Federal Reserve hit the rate trigger four times in 2018, as the Fed responded aggressively to a red-hot U.S. economy. However, the global trade war and slower U.S. growth has resulted in the Fed lowering its forecast to two hikes in 2019. This could be overly optimistic, as the rate futures market has forecasted no rate hikes until 2020. On Monday, Fed President Michelle Bowman said that she was satisfied with current monetary policy, and that the labor market and inflation levels had put the economy in a “good place”.

Canada’s labor market ended the week with an exclamation mark, as the economy created 66.8 thousand jobs in January, crushing the estimate of 6.5 thousand. It was the second banner reading in three months. Still, the Bank of Canada is not expected to raise rates at its next meeting on March 6. Weak oil prices are weighing on inflation, and the Canadian dollar is down 1.1 percent in February. Similar the Fed, the BoC has become more dovish, after raising rates three times in 2018.

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USD/CAD Fundamentals

  • 11:15 FOMC Member Bowman Speaks

  • 10:00 US JOLTS Job Openings

  • 12:45 Fed Chair Powell Speaks

USDCAD

Open: 1.3301 High: 1.3314 Low: 1.3255 Close: 1.3256

 

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.3049

1.3125

1.3200

1.3290

1.3383

1.3445


USD/CAD posted small losses in the Asian session and the downward trend has continued in European trade

  • 1.3200 is providing support

  • 1.3290 is the next resistance line

  • Current range: 1.3200 to 1.3290

Further levels in both directions:

  • Below: 1.3200, 1.3125 and 1.3049

  • Above: 1.3290, 1.3383, 1.3445 and 1.3547

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