USD/CAD Rates To Watch Following Canada Employment Report

With that said, USD/CAD may continue to consolidate ahead of the next BoC meeting as it appears to be stuck in a narrow range, but swings in risk appetite sway the exchange rate as the US Dollar still broadly reflects an inverse relationship with investor confidence.

USD/CAD RATE DAILY CHART

Image of USD/CAD rate daily chart

Source: Trading View

  • Keep in mind, USD/CAD cleared the January low (1.2957) following the US election, with the exchange rate trading to fresh yearly lows in November and December as the Relative Strength Index (RSI) established a downward trend.
  • USD/CAD started off 2021 by taking out last year’s low (1.2688) even though the RSI has broke out of the bearish formation, with lack of momentum to hold above the 1.2770 (38.2% expansion) region pushing the exchange rate towards the 1.2620 (50% retracement) area.
  • However, the failed attempt to test the 1.2620 (50% retracement) area may lead to a near-term correction in USD/CAD as the RSI appears to be reversing ahead of oversold territory, with a break/close above 1.2770 (38.2% expansion) bringing the 1.2830 (38.2% retracement) region back on the radar.
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