USD/CAD Price Analysis: Bears Take Over And The Pair Loses The 20-Day SMA

By Patricio Martín of FXStreet

Monday, July 31, 2023 3:20 PM EDT

USD/CAD fell more than 0.50% on Monday, below the 20-day SMA towards the 1.3170 area.
Higher Oil prices support the CAD while the USD trades relatively flat.
All eyes are on US employment data from July.

On Monday, the USD/CAD cut a four-day winning streak and fell below the 20-day Simple Moving Average (SMA) near the 1.3170 area. A flat USD, higher Oil prices, and a better market mood are responsible for the CAD’s advance. All eyes are now on US employment data to be released this week.

Regarding the next set of employment data, markets foresee a decline in job creation while maintaining wages and an unchanged unemployment rate. Since Chair Powell stated last week that the decision to set the next interest rate will only be based on new data, the direction of the US labor market will be crucial for investors to model their expectations regarding the next Fed decisions. Powell also mentioned that the banks anticipate below-trend growth and "some" labour market softening to normalise inflation.

The JOLT's Job Opening report will be released on Tuesday, and the ADP Employment Change on Wednesday. The primary week's highlight, the Non-Farm Payrolls (NFP) report, will be released on Friday. New unemployment claims data will be released on Thursday.

On the CAD front, the week’s highlight will be the S&P Global Manufacturing PMI from July. In the meantime, CAD’s bulls are supported by higher Oil prices as the West Texas Intermediate (WTI) barrel rose to $81.13 and the Brent to $84.88.

USD/CAD Levels to watch

The USD/CAD has a bearish outlook for the short term, per the daily chart. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) hint at a strong bearish momentum. Furthermore, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), implying that the bears retain control on a broader scale.
Support levels: 1.3150, 1.3120, 1.3100.
Resistance levels: 1.3215 (20-day SMA), 1.3250, 1.3270.

USD/CAD Daily chart

(Click on image to enlarge)

USD/CAD

OVERVIEW
Today last price	1.3166
Today Daily Change	-0.0088
Today Daily Change %	-0.66
Today daily open	1.3254

TRENDS
Daily SMA20	1.3219
Daily SMA50	1.3305
Daily SMA100	1.3423
Daily SMA200	1.3463

LEVELS
Previous Daily High	1.3255
Previous Daily Low	1.3201
Previous Weekly High	1.3255
Previous Weekly Low	1.3147
Previous Monthly High	1.3585
Previous Monthly Low	1.3117
Daily Fibonacci 38.2%	1.3234
Daily Fibonacci 61.8%	1.3222
Daily Pivot Point S1	1.3218
Daily Pivot Point S2	1.3183
Daily Pivot Point S3	1.3165
Daily Pivot Point R1	1.3272
Daily Pivot Point R2	1.329
Daily Pivot Point R3	1.3326

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