USD/CAD looks to continue the losing streak, hovering near 1.3650.

FUNDAMENTAL OVERVIEW

• USD/CAD weakens as the possibility of the US Federal Reserve refraining from an interest rate hike in December becomes more likely.
• The US Dollar has weakened in response to less favorable economic data released last week.
• The Bank of Canada (BoC) is anticipated to maintain higher interest rates for an extended duration.

USD/CAD is set to extend its four-day losing streak, hovering near 1.3650 in the Asian trading session on Monday. The pair is under downward pressure due to the expectation that the US Federal Reserve (Fed) may pause its monetary policy tightening, following disappointing US employment data.

Meanwhile, on the Canadian side, weaker labor statistics could weigh on the Canadian Dollar (CAD). Statistics Canada’s recent release of employment data for October revealed a Net Change in Employment of 17.5K, falling short of the expected 22.5K, compared to the 63.8K in September. Additionally, the Unemployment Rate increased from 5.5% to 5.7%.

Last week, Bank of Canada (BoC) Governor Tim Macklem stated that indications suggest the neutral interest rate is more likely to be higher than lower. The release of US Non-Farm Payrolls (NFP) data may have encouraged investors, as they were anticipating a slowdown in economic data to convince the US Federal Reserve that additional rate hikes are unnecessary.

However, the report showed a figure of 150K, below the expected 180K, and a significant drop from the 297K recorded in September. Investors are expected to closely monitor Canada’s Ivey Purchasing Managers Index, set to be published on Monday.

Additionally, the US Michigan Consumer Sentiment Index will be a focal point later in the week.

USD/CAD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

USD/CAD is currently trading within a down channel.

USD/CAD is positioned below all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the selling zone, while the Stochastic oscillator suggests a negative trend.

Immediate Resistance level: 1.3728

Immediate support level: 1.3628

HOW TO TRADE USD/CAD

Following a significant upward movement and establishing a higher high pattern, USD/CAD encountered resistance and was subsequently rejected, initiating a sharp downward trend. Presently, the price is approaching a critical support zone, and a breach of this zone could lead to further declines.

TRADE SUGGESTION- STOP SELL– 1.3603, TAKE PROFIT AT- 1.3497, SL AT- 1.3687.