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USD/CAD Sideways Channel Intact - Brace for a Breakout! 

EagleFX

The USD/CAD pair was closed at 1.34199 after placing a high of1.35127 and a low of 1.33912. Overall the movement of the USD/CAD pair remained bearish throughout the day. The pair USD/CAD remained depressed and dropped to its recent 3 months lowest level below the 1.3400 level. The fresh selling bias of the currency pair was due to the Canadian dollar's strength after the release of the jobs report.

At 17:30 GMT, the employment Change from Canada showed that 289K jobs were added in May for the first time since pandemic. The Unemployment Rate in May also dropped to 13.7% from the expected 15.0% and supported the Canadian dollar. The strong Canadian dollar dragged down the USD/CAD pair on Friday to its recent 3 months lowest level. The Ivey PMI from Canada was released at 19:00 GMT and showed that it surged to 39.1 from the expected 30.8 in May.

On the other hand, the US dollar was also influential on the day due to more robust job reports. The Non-Farm Employment Change reported 2.509M jobs in May against the expectations of job loss by 7.750M. The Unemployment Rate from the US dropped to 13.3% from the expectations of 19.4% and supported the US dollar.

On Friday, the crude oil prices also supported the commodity-linked currency Loonie by a strong intraday rally in crude oil prices. This coupled with the stronger domestic jobs data and gave an additional boost to CAD, which offset the increasing demand of the US dollar, and hence, USD/CAD dropped.


Daily Technical Levels

Support Resistance

1.3372 1.3497

1.3318 1.3568

1.3247 1.3622

Pivot Point: 1.3443

On Monday, the USD/CAD is trading at 1.3405, holding right above 1.3395 support level. A bearish breakout of 1.3395 level can lead the USD/CAD prices further lower towards the 1.3310 level while the resistance still holds around 1.3480. Selling bias is still dominating the market as the 50 EMA and RSI are supporting bearish bias. For now, we should look for a breakout opportunity, and i think adding a sell position below 1.3395 can help us capture some profits. Good luck!

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