Canada’s Exchange Rate Today - The USD/CAD pair began the week in a calm environment, moving narrowly around the 1.3370 level during the Asian trading session.
 
The spot rate remains below the two-month high reached on Friday, currently trading near the 50% Fibonacci retracement level of the May to July decline.
 
While there are signs of slowing U.S. labor demand, strong wage growth and declining unemployment indicate continued tightness in the labor market.
 
This will likely lead the Federal Reserve (Fed) to keep interest rates higher for longer, supporting the USD to strengthen during downturns, particularly on Monday.
 
On the other hand, the Canadian dollar (CAD) faces pressure following a lackluster domestic employment report.
 
Additionally, crude oil prices have fallen from recent highs, weakening the oil-linked Loonie, contributing to the CAD’s decline today.
 
Fundamentally, the current conditions suggest the path of least resistance for the spot rate is upward. However, any rally may require further strength and consolidation above the 1.3400 level, or the 100-day Simple Moving Average (SMA), to prompt a broader move.
 
The USD/CAD pair may then climb towards the resistance zone around 1.3445-1.3450. This area includes the 200-day SMA, which is significant, and the 61.8% Fibonacci retracement level.
 
This Fibonacci level should act as a key point, and if breached, it could trigger a new move, opening up room to continue the recent recovery from below 1.3100, the year-to-date (YTD) low reached in July.
 
On the downside, the area around 1.3350 currently serves as a barrier, limiting immediate declines towards the 38.2% Fibonacci retracement level near 1.3300.
 
Further declines may prompt renewed buying interest near the horizontal support at 1.3250, with the downside likely capped around 1.3225, or the 23.6% Fibonacci retracement level.
 
Still, additional selling could erase near-term bullish potential and leave the USD/CAD pair vulnerable to a drop below the 1.3200 level. As a result, the spot rate may accelerate downward towards the support around 1.3160-1.3150 before testing the 1.3100 level.
 
Warning!
 
This analysis is based on fundamental and technical insights from reliable sources and is not financial advice. This content is meant to enhance readers' knowledge. Always conduct independent research on forex information to guide your trades.
 
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