USD/CAD forecast ahead of the September OPEC+ meeting

The USD/CAD price rose slightly after the relatively strong Canada GDP data and as crude oil prices retreated ahead of the upcoming OPEC+ meeting. The pair rose to 1.2653, which was the highest level since August 27. 

Canada GDP data

The Canadian economy recorded a strong recovery in June as the country accelerated its reopening process. According to Statistics Canada, the economy rose by 0.7% in June after falling by 0.5% in the previous month. This increase was in line with what analysts were expecting. 

Still, the economy contracted by 0.3% on a quarter-over-quarter (QoQ) basis in the second quarter. This weakness was mostly because of the lockdowns that happened in April and May as the country experienced more Covid cases. In total, the Canadian economy rose by 12.72% on a year-on-year basis in the second quarter.

The USD/CAD price likely rose because the Canadian economy faces key risks ahead. For example, the president has called for an election that will take place on September 2021. The goal of this poll is for him to gain majority in parliament and implement his agenda. Still, recent polls show that the outcome is far from certain.

The country is also facing a new wave of the Delta variant outbreak. After recording a sharp decline of cases recently, the number of daily cases has increased to more than 3,340. This is substantially higher than the 7-day average of 2,817. Indeed, on Monday, the American government announced a new advisory against making non-essential travel to the country.

Meanwhile, the USD/CAD is rising as the price of crude oil heads to the biggest monthly decline this year. Brent and West Texas Intermediate (WTI) have declined by more than 7% this month. As such, investors will be focusing on the upcoming OPEC+ meeting. Analysts expect that the cartel will maintain the current pace of production as it tries to stabilize prices.

USD/CAD analysis

The hourly chart shows that the USD/CAD price formed a strong support at 1.2575. It has struggled moving below this level several times since August 24. At the same time, it is approaching the neckline of this pattern at the 1.2705 resistance level. It has even crossed the key 25-period and 50-period exponential moving averages (EMA). 

Therefore, the pair will likely keep rising as bulls target this resistance level. It will be extremely bullish if it manages to move above this resistance level.