The USDCAD broke and posted a weekly close below the big psychological number 1.3000, which gives a strong case for more bearishness in the market. The first important level of support comes at 1.2920 and a close below this level can open the door for more weakness all the way down to 1.2814. On the upside a daily close above the round number 1.3000 can send the USDCAD exchange rate up to 1.3065.
The stochastic indicator is not yet in oversold territory, so we can safely expect the downside to extend more. However, since August is a very slow trading month we can also expect more consolidation until the summer trading period is over. There is only one major risk event scheduled on the Canadian economic calendar. Friday we have the Unemployment rate, which is expected to inch lower to 5.8% versus 6% previous reading.
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