US Dollar Forecast: USD/CAD Rally Eyes September High
US Dollar Forecast: USD/CAD
USD/CAD stages a four-day rally as it extends the advance following the better-than-expected US Non-Farm Payrolls (NFP) report, but the exchange rate may track the negative slope in the 50-Day SMA (1.3606) if it struggles to close above the moving average.
US Dollar Forecast: USD/CAD Rally Eyes September High
USD/CAD continues to carve a series of higher highs and lows as the NFP report showed the US adding 254K jobs in September versus forecasts for a 140K print, and the exchange rate may continue to register fresh monthly highs as the ongoing expansion in employment curbs speculation for another 50bp Federal Reserve rate cut.
In turn, the US Dollar may continue to appreciate ahead of the next Federal Open Market Committee (FOMC) rate decision on November 7 even though Chairman Jerome Powell and Co. forecast ‘that the appropriate level of the federal funds rate will be 4.4 percent at the end of this year,’ and little signs of an imminent recession may lead to a growing dissent within the FOMC amid the threat of a policy error.
With that said, USD/CAD may continue retrace the decline from the September high (1.3648) as it pushes above the opening range for October, but exchange rate may hold within last month’s range should it snap the recent series of higher highs and lows.
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Strategist; USD/CAD Price on TradingView
- Keep in mind, USD/CAD trades above the 50-Day SMA (1.3607) for the first time since August after testing the March low (1.3420), and a breach above 1.3630 (38.2% Fibonacci retracement) may push the exchange rate towards the September high (1.3648).
- Next area of interest comes in around 1.3700 (38.2% Fibonacci extension) but USD/CAD may track the negative slope in the moving average if it struggles to close above the indicator.
- Failure to push above 1.3630 (38.2% Fibonacci retracement) may keep USD/CAD within the September range, with a move below 1.3520 (23.6% Fibonacci extension) bringing 1.3440 (23.6% Fibonacci retracement) back on the radar.
Additional Market Outlooks
AUD/USD Forecast: RSI Continues to Move Away from Overbought Zone
EUR/USD Vulnerable on Close Below 50-Day SMA
USD/JPY Outlook Mired by Negative Slope in 50-Day SMA
Gold Price Weakness Pulls RSI Back from Overbought Zone
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
City Index is a trading name of StoneX Financial Pty Ltd.
The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.
While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.
StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.
It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.
StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.
© City Index 2024