As we noted in today’s “Fundamental Analysis“, “given the strong upward momentum, it is logical to assume further growth.” USD/CAD is in the bull market zone, above the key support level 1.2860. As of this writing, the pair is trading near 1.3545 (slightly below today’s and 26-month high 1.3550), in a sustained bull market. The breakdown of the local resistance level 1.3350 will be a confirming signal of our assumption.
The driver of today’s movements in the USD/CAD pair may be the publication (at 12:30 and 13:45 GMT) of important macro statistics for the US and Canada and the speech (at 18:00) of the head of the Fed Powell.
He may give new comments on the future monetary policy of the Fed. If Powell makes unexpected announcements, then market volatility could rise sharply again. If market participants consider them soft, then this will provoke fixation in parts of long dollar positions, which will cause its corrective decline at the end of the trading week.
In general, investors are set to further strengthen the dollar, which also enjoys high demand in this situation of geopolitical tensions in Europe as a defensive asset.
*) for the events of the upcoming week, see the Key economic events of the week 26.09.2022 – 02.10.2022
Support levels: 1.3462, 1.3450, 1.3320, 1.3227, 1.3125, 1.3080, 1.2960, 1.2910, 1.2860
Resistance levels: 1.3550, 1.3600
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