This week, the Canadian dollar continued to strengthen, reaching a seven-week high and breaking 1.35 against the US dollar. This growth is supported by expectations of tight Bank of Canada policy and higher crude oil prices.
Fresh data also points to a likely 0.1% expansion of Canadian GDP in August, raising hopes for the country’s recovery after an unexpected slowdown in the second quarter. Inflation exceeded expectations in September, which could lead to an extension of the period of tight monetary policy by the Canadian central bank. It is also important to note that the Canadian dollar is supported by rising oil prices, which contributes to the increase in foreign exchange in the country.
USD/CAD Weekly Forecast October 2 — 6, 2023
The currency pair Canadian Dollar to US Dollar USD/CAD ends the trading week near the level of 1.3451. The pair continues to move as part of the development of the correction and the bullish channel. Moving averages indicate a bullish trend. Prices are again testing the area between the signal lines, which indicates pressure from buyers of the currency pair and potential continued growth in the near future. At the moment, we should expect an attempt to develop a bearish correction and a test of the support level near the 1.3305 area. Then, a rebound upward and continued growth of quotes with a target above the level of 1.3965.
An additional signal in favor of growth in the USD/CAD currency pair will be a test of the bearish trend line on the relative strength index (RSI). The second signal will be a rebound from the upper border of the downward correction channel. Cancellation of the option to increase quotes of the USD/CAD currency pair in the current trading week of October 2 — 6, 2023 will be a fall and a breakdown of the 1.3125 area. This will indicate a breakdown of support and a continuation of the fall to the area below the level of 1.2845. Confirmation of growth in the pair will be a breakdown of the resistance area and closing of the price above the level of 1.3775, which will indicate a breakdown of the upper boundary of the next downward channel.
USD/CAD Weekly Forecast October 2 — 6, 2023 suggests an attempt to develop a correction and test the support area near the level of 1.3305. Further, continuation of the fall with the target below the level of 1.3965. An additional signal in favor of a decline will be a test of the downward trend line on the relative strength index (RSI). Cancellation of the fall scenario will be a strong growth and a breakdown of the 1.3125 area. This will indicate a breakdown of an important resistance level and a continuation of the rise with a target above 1.2845.
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