After an impulsive and non-volatile bullish trend pushing the price at the edge of 1.3600 area, USD/CAD is currently struggling to maintain the momentum above 1.3600 with a daily close. Ahead of US and Canadian Employment reports this week, the pair is expected to trade with higher volatility.
USD has been the dominating currency in the pair since the price bounced off the 1.2750 area with a daily close. The recent US Rate Hike to 2.50% from the previous value of 2.25% enabled the currency to sustain the bullish momentum. Ahead of NFP on Friday, today US Unemployment Claims report is going to be published which is expected to have a negative result of increase to 220k from the previous figure of 216k, ISM Manufacturing PMI is expected to decrease to 57.7 from the previous figure of 59.3, and ISM Manufacturing Prices are also expected to decrease to 57.9 from the previous figure of 60.7. Moreover, tomorrow Average Hourly Earnings report is expected to increase to 0.3% from the previous value of 0.2%, Non-Farm Employment Change is expected to increase to 178k from the previous figure of 155k, and Unemployment Rate is expected to be unchanged at 3.7%.
On the other hand, recently Canada's Manufacturing PMI report was published with a decrease to 53.6 from the previous figure of 54.9 which lead USD to regain momentum over CAD recently. Additionally, tomorrow Canada's Employment Change report is going to be published which is expected to have a significant decrease to 6.8k from the previous figure of 94.1k and Unemployment Rate is expected to rise to 5.7% from the previous value of 5.6%.
Meantime, USD is expected gain further momentum over CAD amid expectations of the upcoming reports. Thus, USD is quite optimistic, and CAD is expected to be hurt by downbeat reports. Until Canada comes up with better economic data in the coming days, USD is expected to hold the upper hand in the pair.
Now let us look at the technical view. The price has been quite impulsive with the recent bearish daily close which is currently being engulfed by certain bullish pressure today. Though the trend is strongly bullish, certain corrections along the way and a formation of Bearish Divergence on the weekly chart indicate that some bearish pressure can be observed along the way. The price is currently expected to pullback towards 1.3500 area before pushing higher towards 1.40 resistance area in the future. As the price remains above 1.3200 area with a daily close, the bullish bias is expected to continue.
SUPPORT: 1.3200, 1.3350, 1.3500
RESISTANCE: 1.3700, 1.3850, 1.4000
BIAS: BULLISH
MOMENTUM: VOLATILE
