USD/CAD EXCHANGE RATE OVERVIEW HINDERED BY FAILED ATTEMPTS TO TEST THE JUNE HIGH
The USD/CAD seems to have recently changed course after the fail attempt to try out the June High, which was 1.3801, and a reversal from March low that was 1.3315 might continue to unravel in July with the update to the Canadian employment report that is expected to show a meaningful recovery within the labor market.
Until that time comes, the channel support break might push USD/CAD to the new month low as it carves the array of lower lows and highs. However, it’s yet to be seen whether the rebound in the employment rates might impact the outlook of the monetary policy as the Federal Bank of Canada Governor ruled out the V-shape recovery. This happens following the news the Canadian Dollar Drops After Unfavorable News Releases.
It is yet to be seen that the BoC would retain the dovish forward guidance in the next few months as the Canadian Central Bank maintains the dedication to continue this large scale resource purchases until the recovery of the economy is perfectly underway. But the bank’s governor and associates seem to have no interest in implementing additional standard measures this year as the central bank focus would shift to support the continuation of growth in employment and output.
That said, great developments in Canada might keep the USD/CAD exchange under increased pressure in July in case the Bank of Canada handles speculation for extra monetary support funds, and the USD/CAD rate might still struggle to maintain the advance from the 1.3315, in June.
USD/CAD Exchange Rate Chart
- Always remember the fact that the USD/CAD exchange rate rally in early 2020 arose after the failed try to break or close under the Fibonacci overlap within 1.2950 to 1.2980 and 78.6% expansion and 61.8% retracement, with the USD/CAD breaking out from the range-bound price actions from Q4 of the year 2019 to surpass the October high.
- Nevertheless, the adjustment from this year high, which was 1.4667. This managed to seal the price action gap from the end of the month with the exchange rate, pulling back and pushing the RSI into overbought territory for the first time in 2020.
- The latest developments in this RSI showed a possible shift in the USD/CAD trends with the oscillator breaks out of May’s downward trend. However, the reverse from March lows, which was 1.3315, seems to have stopped after the failure to attempt the June high.
- The subsequent interest area comes in about 1.3510 to 1.3320 that matches the June Low that was followed by the 23.6% expansion zone.
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