The USD/CAD pair is retesting the weekly low as it faces downward pressure from multiple factors. The US Dollar is being weighed down by expectations of a larger interest rate cut by the Federal Reserve in September, while an increase in Oil prices is supporting the Canadian Dollar.
Despite the downward trend, the pair is finding some support as traders await the release of key employment data from the US and Canada later in the day.
Technically, the recent breach of the 200-day Simple Moving Average (SMA) has triggered a bearish sentiment, with oscillators on the daily chart showing negative momentum. This indicates a potential further decline in the USD/CAD pair towards recent lows.
Traders should watch for a break below the weekly low at 1.3485 to confirm a continuation of the downward trend. On the other hand, a rebound above 1.3525 could signal a potential recovery towards the 200-day SMA resistance at 1.3590.
Analysis:
The USD/CAD pair is facing downward pressure due to expectations of a Fed rate cut and higher Oil prices. Traders are awaiting key employment data to determine the pair’s next move. From a technical standpoint, the pair is in a bearish trend with potential for further decline. Traders should watch for a break below 1.3485 for confirmation of a continued downward trend, while a rebound above 1.3525 could signal a recovery towards 1.3590.