USD/CAD hits resistance at pivotal zone
USD/CAD has drifted lower today, suggesting that investors are not too alarmed by the jobless rate rising to a 7 year high of 6.6% as we found out on Friday. Last week saw the BoC cut rates for the third time in as many meetings. Investors are expecting a couple of more cuts before the year is out, particular if the jobs data shows further weakness. However, this does not mean the USD/CAD will necessarily rise. The bigger driver for this pair will be the US dollar, as it the case with all major currency pairs. The greenback came under somewhat intense pressure last month as investors priced in Fed's expected rate cuts, totally around 100 basis points for this year. With the US dollar on a slippery slope, the USD/CAD could resume lower now that it is testing a pivotal area between 1.3570 to 1.3600 region. Previously this area was major support until it gave way a couple of weeks ago. Once support, will this area now turn into strong resistance and lead to another drop?
By Fawad Razaqzada, market analyst at FOREX.com
By Fawad Razaqzada, market analyst at FOREX.com
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