USD/CAD has been non-volatile and impulsive with the bullish momentum for a few weeks in a row which led the price to reside at the edge of 1.3300-50 resistance area. Despite the recent headwinds in the US economy, USD managed to sustain momentum against CAD which is struggling to generate a strong counter-move to establish an opposite trend in the pair.
In light of recently published positive economic reports, USD has picked up steam, but it is expected to get quite volatile with the upcoming gains. Recently US Building Permits report was published with a slight decrease to 1.26M as expected from the previous figure of 1.27M and Housing Starts increased to 1.23M as expected from the previous figure of 1.21M. Today US Core Durable Goods Orders report is going to be published which is expected to increase to 0.4% from the previous value of 0.0%, Durable Goods Orders are likely to have decreased to -2.2% from the previous value of 0.7%, Unemployment Claims are expected to decrease to 215k from the previous figure of 216k, and Revised UoM Consumer Sentiment is expected to show a slight increase to 98.4 from the previous figure of 98.3. The FED is expected raise the official funds rate next month and three more times in 2019. The strong likelihood provides USD with support. However, the rate hike is going to hamper the long-term financial sector with a big margin.
On the other hand, the Bank of Canada is currently evaluating its monetary policies and expected to announce major changes in the coming days. The reviewing of monetary policy is expected to last till 2021. The central bank could renew its inflation target which has been kept at 2% for last 23 years. Today Canada's Wholesale Sales report is going to be published which is expected to increase to 0.1% from the previous value of -0.1%. If the report reveals better-than-expected figures, it is expected to provide the required push for the currency in the long run. Moreover, on Friday CPI and Retail Sales reports are going to be published which are expected to have a greater impact on future CAD gains.
In the meantime, USD has been trading mixed amid the recent economic reports. Nevertheless, USD managed to sustain the bullish momentum over CAD whereas any positive economic results from the CAD side is expected to lead to an impulsive counter-move, resulting in bearish pressure. USD is expected to sustain its momentum further with the bullish trend in the long term.
Now let us look at the technical view. The price is currently residing at the edge of 1.3300-50 resistance area amid bearish pressure today while Bearish Divergence is being formed along the way. If the price has a daily close below 1.3300, it is expected to lead to further bearish pressure with a target towards 1.3050 support area in the coming days. As the price remains below 1.3350 area with a daily close, there are certain chance of a bearish counter-move inside the current bullish bias.
SUPPORT: 1.2950, 1.3000-50
RESISTANCE: 1.3300-50
BIAS: BULLISH
MOMENTUM: NON-VOLATILE
