The price trend of the US-Canadian (US-CAD) currency pairing started increasing steadily last week from 1.20070 to 1.21310.
The recent employment rates and economic data released in both the US and Canada are driving the pair’s value in a new and higher direction.
Forexfactory.com reported that the US May total non-farm payroll employment rate rose by 559,000, up from April’s 278,000 increase.
Meanwhile, Canada’s job data dropped to 68,000, which as well as the value of the Canadian dollar may add to the concerns of the Canadian government.
According to wellxin.com, US Treasury Secretary Janet Yellen believes President Joe Biden’s proposed massive $4 trillion infrastructure plan focusing on specific infrastructure investment and funding domestic policy will be of great benefit to the nation’s economic growth during the Covid-19 crisis.
According to Forexfactory, the Purchasing Managers Index – or PMI – data for May rose 64 points, up from 62.7 points in April.
In addition, the key economic data reports to be monitored this week include the National Bank of Canada’s interest rate announcement and consumer price index data – which is expected to propel US economic growth.
Technically, the US-CAD pairing is trending in the form of convergence.
The momentum of the downtrend is slowing and reversing the uptrend as the Relative Strength Index and price momentum are reversing and forming.
A convergence is clear and is waiting for a breakpoint after the release of key economic data this week.
Therefore, for this week’s trading recommendation, investors should buy at 1.20600, setting the first take-profit function at 1.21120, with the second at 1.21400, and set the stop-loss function at 1.20400.