The USD/CAD pair has risen to 1.3750 as the US Dollar has rebounded after Federal Reserve Chair Jerome Powell’s recent comments on interest rates. Powell’s less-hawkish stance has boosted the Greenback, pushing the US Dollar Index (DXY) to 105.50. Investors are closely monitoring Fed policymakers’ speeches for clues on the Dollar’s next move.
Minneapolis Fed President Neel Kashkari has expressed concerns about the housing market’s impact on disinflation, suggesting that interest rates may remain unchanged throughout the year. This has added to the strength of the Loonie, but investors are now turning their attention to the upcoming Canadian Employment data for further direction.
This week, the Canadian Dollar will be influenced by the release of the April Employment data, with expectations of a 20K increase in payrolls and a rise in the Unemployment Rate to 6.2%. The outcome of this data will play a significant role in shaping the Bank of Canada’s interest rate outlook.
The USD/CAD pair has shown a strong recovery, finding support near the upper border of the Ascending Triangle formation on the daily chart. The 20-day EMA at 1.3700 is acting as a support level for the US Dollar bulls, while the RSI indicates indecisiveness among investors.
A potential buying opportunity could arise if the pair breaks above the recent high of 1.3785, leading to a push towards the next resistance levels at 1.3838 and 1.3900. On the other hand, a breakdown below the support level at 1.3600 could expose the pair to lower levels around 1.3547 and 1.3500.
Overall, the USD/CAD pair is poised for further movement based on upcoming economic data releases and Fed speeches. Investors will be closely watching the developments in both the US and Canadian markets for cues on the future direction of the currency pair.
