The Canadian dollar fell to a weekly low against the greenback despite the DXY has retreated for four consecutive days to 93.39 on Thursday. USD/CAD was up 28 basis points to settle at C$1.29709, attempting to test a resistance ahead near 1.2990 placed by several previous session highs.
From fundamental perspective, we can see some important data for Canadian labour market condition will be released on Friday, including Net Change in Employment and Unemployment Rate. The previous figure for employment’s net change fell by 1,1000, while this time on May it’s predicted to be 22,000 jobs increase, showing a positive signal for economy. At the same time, the unemployment rate is estimated to be 5.8 percent, same as previous one. From here, the short-term outlook for the pair may pull back in these two days, and the technical resistance also boosts the chance.
On the other hand, the long-term outlook for USD/CAD is probably staying with positive signals, with the DXY has been moving in an upside channel under such a solid economic performance in U.S., revealed by a robust labour market and firming inflation, which have boosted expectations the Federal Reserve will raise benchmark U.S. interest rates next week. Many economists believe the U.S. central bank will hike rates two more times after its June 12-13 policy meeting to prevent the economy from overheating.
From technical perspectives, a horizontal line depicted near 1.2997 is seen as a short-term hurdle that may impede the pair from rising. However, since it’s moving in an ascending price channel, if it succeeds to break out higher the region between 1.2997 to 1.3120 would be its space for growth.
Chart 1: USDCAD Daily
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