Welcome to a brand new week of forex trading! On today’s canvas is the 4-hour chart of the USDCAD pair. As you can see, the pair has been trending south for the past month. After hitting a new 3-month low of 1.0107 on August 5, it then rallied strongly. At present, it is trading below 1.0300. A break above this could send it to 1.0350 or at 1.0400. However, it looks like the pair is experiencing some selling pressure at 1.0300. Interestingly, this mark almost falls in line with the 38.2% Fibonacci retracement that I drew. Hence, if the pair is unable to break above the resistance at 1.0300, it could once again revisit its previous low at 1.0107.
Fundamentally, the Canadian dollar or the loonie weakened against the greenback which is represented by the recent rally in the pair because of the dismal employment figures of Canada for the month of July. Canadian firms unexpectedly slashed about 9,300 jobs in July after tallying about 93,000 in job additions in June. Initially, Canada’s employment change number was seen to post about 13,700 new jobs. This drop in Canadian employment caused the nation’s jobless rate to worsen to 8.0% from 7.9%, further lessening the possibility of a central bank rate hike.
For this week, Canada’s July housing starts and trade balance in June are due on Tuesday (August 10) and Wednesday (August 11), respectively. Housing starts for the month of July are seen to be at 185,000 which was a little modest than the previous month’s score of 193,000. Canada’s trade balance for the month of June, on the other hand, are seen to have posted a surplus of C$400 million from a deficit of C$500 million. Better-than-expected results from these reports could resume the USDCAD’s downtrend.