It looks like USD/CAD is attempting to break above this long-term trend line, but I think the resistance might hold.
Will the upcoming catalysts spur a big move?
This pair is back to testing the falling trend line visible on the daily time frame, and the higher lows suggest that buyers are attempting another upside break.
The trend line has been holding since June last year, though, so I think it could still be a pretty solid resistance level!
Will USD/CAD sellers step up right here?Stochastic is pulling up again to reflect a pickup in bullish pressure, but the oscillator is also hovering around the overbought zone to signal exhaustion among buyers.
Turning back down would confirm that bearish momentum is returning, which might be enough to take USD/CAD back to the lows near the 1.2000 mark later on.
I’m counting on the highly-anticipated NFP release to determine where the pair is headed next. After all, another jobs miss could be enough to dash hopes of a Fed rate hike anytime soon.
As Forex Gump outlined in his June NFP Event Preview, most leading indicators are hinting at a weak outcome.
Even a bullish dollar reaction from any upside surprise might not be sustained, as number crunchers say that it would take at least A MILLION jobs added to revive tightening expectations.
In contrast, the BOC is already in the process of scaling back its stimulus, and the central bank could keep at it while Canada’s data keeps improving.It’s also worth noting that crude oil prices seem unstoppable in their climb, which is bullish for the correlated Loonie.
For now, the OPEC+ has delayed its meeting to discuss a potential output deal adjustment, so the commodity could hold on to its gains near $76 per barrel.
I haven’t set any entry orders yet, but I’ll be keeping a close watch on the 1.2450-1.2500 area to see how price reacts to these levels during the NFP release.
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