The USD/CAD pair is currently trading within a tight range above the support level of 1.3700, as the US Dollar remains strong and the Oil price continues to recover. The US Dollar Index (DXY) is on the rise, boosted by the Federal Reserve’s decision to keep interest rates unchanged due to unexpected inflation readings. On the other hand, the Canadian Dollar is benefiting from the increase in Oil prices following a sharp drawdown in US oil stockpiles.
Investors are eagerly awaiting the release of Canada’s Employment data for April, scheduled for Friday. The data is expected to show an increase of 20K payrolls, with the Unemployment Rate potentially rising to 6.2%. This information will play a significant role in shaping the Bank of Canada’s interest rate outlook.
The USD/CAD pair has shown signs of recovery after finding support near the Ascending Triangle formation. The 20-day Exponential Moving Average (EMA) at 1.3700 continues to support the US Dollar bulls, while the Relative Strength Index (RSI) indicates investor indecisiveness.
A potential buying opportunity may arise if the asset breaks above the high of 1.3785, leading it towards the resistance levels at 1.3838 and 1.3900. Conversely, a breakdown below 1.3600 could expose the pair to lower support levels at 1.3547 and 1.3500.
Overall, the USD/CAD pair is currently influenced by a combination of factors, including the strength of the US Dollar, the recovery in Oil prices, and the upcoming release of Canada’s Employment data. Investors will be closely monitoring these developments to gauge the future direction of the currency pair.