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Greenback To Bounce Off Lows

USD/CAD

The growth of the US Economy is a clear indication that inflation will rise over time. Yellen can be expected to underscore this in her testimony to Congress later in the week. Expectations are for good and look to make strong rebound in retail sales and industrial production.

US jobs report showed that the labor market continues to tighten overall but this is not the only factor determining wage growth. In terms of employment growth, the June jobs report was strong and labour force growth exceeded employment growth. The increase comes after the falling of the unemployment rate this year.

The Federal Reserve’s semiannual Monetary Policy reported the conduct of monetary policy, economic developments and prospects for the future. Measures of longer run inflation expectations have been relatively stable and Consumer spending was sluggish in the early part of the year but appears to have rebounded recently, supported by job gains.

With gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen according to the expectations of FOMC.

Canada: Ivey Purchasing Manager’s Index came in at 61.6 last week, indicating that purchases were greater than the previous month. According to the statistics, Employment rose by 45,000 and unemployment rate was 6.5%.

Intraday bias in USD/CAD trading above 1.2861 level gets a good support base that reinforces the expectations of changing towards a bullish bias in the upcoming period. And the way is open to head towards the recently recorded top on the near term basis. The price provided a new positive close above the level to confirm its affection by the domination of the bullish bias in the near and medium period.

The pair is waiting to achieve the target at 1.2991 and the price gets its positive momentum. Stochastic stays low around 13.0 level. The pair did find support which was broken and is now seen rising with the support area proving itself stronger. Though the 50EMA and 10SMA are below the current price action, the pair has seen some action towards upward since the start of the session, and signaling further momentum should be the key.

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