The USD/CAD is near the 1.33245 ratio as of this writing. After hitting a low around the 1.31800 ratio last week, the USD/CAD has reacted with what can be interpreted as nervous buying. However, the higher move of the USD/CAD has not happened with a violent amount of price velocity because Forex volumes remain quite light. The results produced early this week in the USD/CAD should be looked at with suspicion by speculators.
Lows in the USD/CAD made last week touched levels not seen since late July 2023. The slight bullish climb in the currency pair the past couple of days may be a simple reaction due to the belief the USD/CAD had been oversold. However, the holiday markets being seen now cannot be trusted a great deal and when financial institutions return to Forex next week behavioral sentiment is likely to become dynamic again as they ponder their outlooks. Bearish perspectives may return.
USD/CAD Bearish Sentiment and the Near-Term
Tomorrow will see jobs numbers from the U.S and Canada, the Non-Farm Employment Change data may get attention, but the real impetus for the USD/CAD will come via wage measurements. The Average Hourly Earnings statistics from the States tomorrow could cause volatility in the USD/CAD because it is considered an important inflation reading for wages. However, traders should not overreact to the reports tomorrow, because light holiday trading will remain in place.
However, early next week the USD/CAD will see increased trading and this will cause a reaction in the currency pair as financial institutions once again position their trading based on their weaker mid-term outlooks regarding the USD. The question is if they will believe the USD/CAD has sold off too much over the past month. Behavioral sentiment will rattle Forex and the USD/CAD next week and traders need to be prepared.
USD/CAD Short-Term Considerations
- Today and tomorrow’s trading in the USD/CAD is likely to remain rather tame. Resistance near the 1.33400 to 1.33500 marks should be watched. If these ratios prove durable it may be a signal additional selling could develop in the USD/CAD.
- Speculators should not expect massive movement in the USD/CAD in the short-term.
- However, U.S jobs numbers should be monitored on Friday because they will affect the USD/CAD going into the weekend, setting up early next week for intriguing results to come.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.33325
Current Support: 1.33200
High Target: 1.33650
Low Target: 1.32890
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