Asset Watch
Wednesday, July 4, 2023
The currency pair’s 100-week moving average acted as resistance during the December 2021 and February/March 2022 rallies, while the August 2022 drawdown ended near the key level. More importantly, the USD/CAD’s 100-week MA is only slightly below the rising support line and provides another layer of defence for the bulls.
Q1 U.S. real GDP was revised upward from 1.3% to 2% on Jun. 29, and the Atlanta Fed expects Q2 real GDP to come in at 1.9% (updated on Jul. 3). U.S. economic growth remains resilient, and the fundamental strength gives the Fed more leeway to raise interest rates. As a result, continued hawkish policy should be bullish for the currency pair.
Could the USD/CAD retest its recent highs near 1.365, or will a breakdown below 1.305 be the next major move?