• USD/CAD strengthened on Tuesday as Canadian dollar weakened ahead of to a possible interest rate cut by the Bank of Canada later this month.
• Expectations for a Bank of Canada rate cut have risen after Friday’s data showed Canada lost 65,500 jobs in August, sending the unemployment rate up to 7.1%.
•The weak labor market underscores ongoing challenges in the economy, signaling to markets that the central bank may consider easing monetary policy to support growth and stabilize employment.
• Investors see nearly a 90% chance the BoC will lower its benchmark rate from its current setting of 2.75% on September 17.
• At GMT 12:03, the US dollar was up 0.07% to 1.3554 against the Canadian dollar.
• Immediate resistance is located at 1.3868(50%fib), any close above will push the pair towards 1.3902(Higher BB).
• Support is seen at 1.3813(SMA 20) and break below could take the pair towards 1.3739(38.2%fib).
Recommendation: Good to buy around 1.3820, with stop loss of 1.3750 and target price of 1.3900
