USD/CAD continues to rise awaiting the American PMIs

• USD/CAD continues six of the last seven days of gains and rises to 1.3550, trading at its highest level since early June.
• The dollar gained momentum during the American session, and the DXY index rose to 103.56.
• Falling oil prices put pressure on the CAD.

In Tuesday’s session, the USD/CAD it continued to gain ground, driven mainly by the general weakness of the CAD. On the other hand, investors await the release of the key manufacturing and services PMIs for August. All eyes will also be on Powell’s speech Friday at the annual Jackson Hole Symposium.

The dollar is trading somewhat weakly against most of its rivals, mainly as investors show more interest in risk-sensitive assets. In terms of data, US Existing Home Sales came in slightly lower than expected at 4.07M in July, up from 4.15M expected and 4.16M previously, but failed to significantly impact the Dollar.

For the rest of the week, the focus will be on the Jackson Hole Symposium, which kicks off on Thursday, and on Wednesday, the US economic calendar will feature data from the S&P Global PMI, which is expected to show a slowdown in the U.S. manufacturing and service sectors.

As for the CAD, no relevant data will be released during the session, and the weakness in oil prices is contributing to the fall of the Canadian currency. In that sense, due to Chinese economic concerns, black gold prices continue to recede and fell to their lowest point since early August.

USD/CAD levels to watch

Assessing technical indicators, USD/CAD shows a short-term bullish outlook. However, traders should be cautious as overbought signals appear, which could lead to a short-term technical correction. The Relative Strength Index (RSI) is in overbought territory above 70.00, while the Moving Average Convergence (MACD) histogram shows more oversized green bars. Furthermore, the pair is above the 20, 100, and 200-day Simple Moving Averages (SMAs), indicating favorable positioning for bulls in the bigger picture.

Support levels: 1.3530, 1.3500, 1.3490.

Resistance levels: 1.3570, 1.3590, 1.3600.

USD/CAD Daily Chart