USD/CAD Price Forecast: Sees more upside above 1.4000 amid upbeat US Dollar

USD/CAD exhibits strength near 1.3980 ahead of Fed Powell’s speech.
The FOMC minutes showed signs of more interest rate cuts in the remaining year.
Investors expect the Canadian jobless rate to have increased further to 7.2% in September.

Sagar Dua FXStreet

The USD/CAD pair trades firmly near over four-month high around 1.3980 during Thursday’s European session, posted last week. The Loonie pair exhibits strength as the US Dollar trades firmly, following recent developments in France and Japan.

During European trading hours, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, revisits the two-month high of 99.00 posted on Wednesday after recovering intraday losses.

The US Dollar faced slight pressure after the release of the Federal Open Market Committee (FOMC) minutes of the September policy meeting, which showed that officials argued in favour of more interest rate cuts in the remainder of the year.

In Thursday’s session, investors will focus on the speech from Fed Chair Jerome Powell scheduled at 12:30 GMT.

In Canada, market participants await the official employment data for September, which will be released on Friday. The labour market data is expected to show that the job conditions deteriorated further, with the Unemployment Rate rising to 7.2% from 7.1% in September.

USD/CAD stays above the 20-day Exponential Moving Average (EMA), which trades around 1.3901, suggesting that the near-term trend is bullish.

The 14-day Relative Strength Index (RSI) oscillates above 60, indicating a strong bullish momentum.

Going forward, a further upside move by the pair above the psychological level of 1.4000 would open the door towards the April 9 low of 1.4075, followed by the April 8 low of 1.4144.

On the flip side, the asset could slide towards the round level of 1.3600 and June 16 low of 1.3540 if it breaks below the August 7 low of 1.3722.

USD/CAD daily chart

Economic Indicator

Unemployment Rate

The Unemployment Rate, released by Statistics Canada, is the number of unemployed workers divided by the total civilian labor force as a percentage. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labor market and a weakening of the Canadian economy. Generally, a decrease of the figure is seen as bullish for the Canadian Dollar (CAD), while an increase is seen as bearish.

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