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  • The United States created 315,000 jobs in August.
  • Markets expect a 75 basis point rate hike from the BoC this week.
  • Bulls are in charge in the 4-hour chart.

Today’s USD/CAD forecast is bullish as the pair extends its gains after the upbeat US jobs report on Friday. According to a poll of businesses, nonfarm payrolls rose by 315,000 jobs in August after rising by 526,000 in July. August was the 20th month in a row with increased employment. There are currently 240,000 more jobs than there were before the outbreak. This report supports the dollar against the Canadian dollar.

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In Canada, there is debate over whether or not there will be a halt after the Bank of Canada announces yet another excessive interest rate increase, pushing its policy rate into restrictive territory for the first time in 20 years.

The neutral rate, or the area between 2% and 3% where monetary policy neither encourages nor weighs on the economy, is where the central bank is focused, according to BoC Governor Tiff Macklem. In the past 20 years, the neutral range has shrunk.

Money market expectations indicate a 75 basis point increase on September 7 to raise the policy rate to 3.25%. That would mark the fourth excessive rate rise of the year and bring the 300 basis point tightening since March to an end.

This might mean consolidation in the pair until the big decision. Money market expectations indicate a 75 basis point increase on September 7 to raise the policy rate to 3.25%. That would mark the fourth excessive rate rise of the year and bring the 300 basis point tightening since March to an end.

USD/CAD key events today

The pair will likely consolidate today as there won’t be any significant news releases from either Canada or the US. Both countries are marking the labor day holiday.

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USD/CAD technical forecast: Poised to push through resistance

USD/CAD forecast

Looking at the 4-hour chart, we see the price trading above the 30-SMA and the RSI above 50, showing bulls are holding the reins. The price has bounced off the 30-SMA and 1.31004 critical support level and is pushing toward the 1.31922 resistance level.

As the trend is bullish, the price will likely break through the resistance and make a new high above 1.31922.

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