The USD/CAD pair on the 4-hour chart is trading above the 200 EMA located at 1.2573 and at the time of writing it is above the 21 SMA showing a bullish signal with a slight inclination of the bearish channel.
Yesterday, ADP data was released, revealing that US private sector employers added 374,000 jobs in August, disappointing consensus estimates that expected a reading of 613,000. This data put downward pressure on the US dollar, but the Canadian dollar could not take advantage.
The Canadian dollar is trading within a downtrend channel slightly inclined. Since August 5, it has found strong support above the 200 EMA and it has been trading between the lower limit of 1.2580 and the upper limit of 1.2695.
If USD/CAD sustains above the 21 SMA and above 1.2600, a bullish move to the 1.2695 resistance zone and the top of the bearish channel is likely.
On the other hand, the US Dollar Index (#USDX), which fell to a two-week low of 92.35 during American trading hours, is currently below the 200 EMA located at 92.63 under downward pressure.
The monthly report of consumer confidence in the United States worsened to 113.8 in August from 125.1 in July. Although the recovery of the US dollar is limited to the downward pressure exerted by the 200 moving average, above 92.70 a recovery of the USDX is expected.
A rally in the US dollar above 92.63 could give USD/CAD bullish strength, and it could rise to 5/8 Murray located at 1.2817.
Our outlook is bullish. As long as the price remains above the 200 EMA, we can buy with targets at 1.2695 and if the bullish force prevails, buy until the 1.2817 resistance. The eagle indicator is showing a bullish signal.
Support and Resistance Levels for September 02 - 03, 2021
Resistance (3) 1.2725
Resistance (2) 1.2680
Resistance (1) 1.2649
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Support (1) 1.2603
Support (2) 1.2573
Support (3) 1.2512
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Trading tip for USD/CAD for September 02 - 03, 2021
Buy above EMA 200 at 1.2573, with take profit at 1.2630 and 1.2695 (4/8), stop loss below 1.2540.
