Free Forex Signals and Forecast: Buy USD/CAD – 06 September 2021

Our free forex signals service today looks at the USD/CHF and we have the entry, stop and take profits levels for you.

After trading at the low below 1.2500 in the previous week, the USD/CAD pair is cautious on Monday.

The USD/CAD pair is currently trading at 1.2542, up 0.14% on the day.

After disappointing US nonfarm payrolls (NFP) data, the US Dollar Index (DXY), which tracks the greenback against six major currencies, traded below 92.20, down 0.23%.

Despite expectations of 750,000 jobs being created in August, the NFP reported only 235,000 jobs being created in the US economy. US Dollar slumped below 92.00 as a consequence of the huge gap. However, following the positive employment report, the dollar has strengthened substantially.

As oil prices fell from $70 highs, the Canadian dollar also lost some of its gains.

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The labor productivity of Canadian workers increased by 0.6% in the second quarter, following a 1.7% decline in the first quarter.

There is a strong indication that the dollar will continue to depreciate. Still, it is important to monitor market sentiment closely since the turmoil in the US and Chinese economies could lead to a flight to safety. An episode of risk aversion would likely trigger higher volatility, damage high beta commodities (like oil), and put downward pressure on the Canadian dollar.

This week, the Bank of Canada’s decision on interest rates will also pose a challenge to the Canadian dollar. In light of the unexpectedly weak second-quarter GDP (growth at 1.1% rather than 2.5% versus expectations), the central bank may adopt a more cautious stance on the economy.

During the current quarter, the downside risks will intensify, and there is a possibility that the monetary policy statement will be reluctant. As a result, the output gap will take longer to close. But to remain in the shadows until after the upcoming early elections on September 20. In this context, the October session to accompany new macroeconomic forecasts may prove more relevant and flexible.

Right now, traders are waiting for the Bank of Canada to announce its interest rate decision later this week.

USD/CAD free forex signals

Instrument: USD/CAD
Order Type: SELL STOP
Entry price: 1.2480
Stop Loss: 1.2585
TP1: 1.2268

Our Risk Setting: 1%
Risk / Reward Ratio: 1:2

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