The Canadian dollar strengthened and topped 1.32, hitting its highest level in nine months. This came after the release of the latest minutes of the meeting, which showed that politicians believe that monetary policy in June was not tight enough, and further rate hikes will be determined by new economic data. Earlier this month, the central bank surprised markets by raising its key interest rate by 25 basis points and resuming the tightening cycle after two consecutive pauses. Recent economic data is a mixed bag, with the May jobs report pointing to a weakening labor market, while retail sales data show high levels of consumer spending. In addition, the Federal Reserve is expected to continue raising rates later this year after a pause in June, which could put pressure on the USD/CAD rate and turn it up to new highs.
USD/CAD Weekly Forecast June 26 — 30, 2023
Currency pair Canadian Dollar to US Dollar USD/CAD completes the trading week near the level of 1.3186. The pair continues to move as part of a strong fall and a bullish channel. Moving averages indicate a bullish trend. Prices have broken through the area between the signal lines down, which indicates pressure from sellers of the currency pair and a potential continuation of the fall in the near future. At the moment, we should expect an attempt to develop a slight correction and a test of the support level near the area of 1.3035. Then, a rebound upwards and the continuation of the rise in quotes with a target above the level of 1.3875.
An additional signal in favor of the rise of the USD/CAD currency pair will be a test of the rising trend line on the relative strength index (RSI). The second signal will be a rebound from the lower border of the bullish channel. Cancellation of the option to raise the quotes of the USD/CAD currency pair in the current trading week of June 26 — 30, 2023 will be a fall and a breakdown of the area of 1.2835. This will indicate a breakdown of support and a continuation of the fall to the area below the level of 1.2575. The rise in the pair will be confirmed by the breakdown of the resistance area and the closing of the price above the level of 1.3545, which will indicate the breakdown of the upper border of the downward correction channel.
Among the important news from Canada that may have an impact on the rate of the Canadian Dollar, it is worth highlighting: Canada Gross Domestic Product (GDP) m/m.
USD/CAD Weekly Forecast June 26 — 30, 2023 suggests an attempt to develop a downward correction and test the support area near the level of 1.3035. Further, continued growth with the target above the level of 1.3875. An additional signal in favor of the rise will be a test of the long-term bullish trend line on the relative strength index (RSI). Cancellation of the growth development option will be a fall and a breakdown of the area of 1.2835. This will indicate a breakdown of important support and a continued decline in the rise with a target below 1.2575.
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