USD/CAD Price Forecast: RSI near 66 signals strong buying interest
USD/CAD is little changed on Thursday, holding near a one-month high. A broadly stronger US Dollar (USD) and diverging interest rate expectations for the Federal Reserve (Fed) and the Bank of Canada (BoC) keep the Canadian Dollar (CAD) on the back foot.
USD/CAD price forecast indicates strong buying interest as the Relative Strength Index (RSI) nears 66. The U.S. Dollar (USD) continues to exhibit potential for an upward trend against select major currencies, including the Canadian Dollar (CAD) and Korean Won (KRW). Analysts from TD Securities anticipate a "selective rally" in the USD, citing diverging employment data releases that will maintain the USDCAD pair above the 1.40 mark.
Canada's weakening labor market relative to the United States further reduces expectations of a December BoC rate hike, reinforcing the notion of a weaker Canadian Dollar. The pair has climbed above the 50-day and 100-day SMAs while the 200-day SMA remains well below the current price. Momentum conditions support the uptrend, with the RSI hovering around 66, nearing overbought territory.
Support levels are found at 1.4200 and 1.4120, with the former acting as resistance and the latter providing support. The October peak near 1.4300 serves as the primary upside resistance, with a break potentially paving the way for gains towards the 1.4400 level.
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