USD/CAD Price Analysis: Bears take over and the pair loses the 20-day SMA

• USD/CAD fell more than 0.50% on Monday, below the 20-day SMA towards the 1.3170 area.
• Higher Oil prices support the CAD while the USD trades relatively flat.
• All eyes are on US employment data from July.

On Monday, the USD/CAD cut a four-day winning streak and fell below the 20-day Simple Moving Average (SMA) near the 1.3170 area. A flat USD, higher Oil prices and a better market mood are responsible for the CAD’s advance. All eyes are now on US employment data to be released this week.

Regarding the next set of employment data, markets foresee a decline in job creation while maintaining wages and an unchanged unemployment rate. Since Chair Powell stated last week that the decision to set the next interest rate will only be based on new data, the direction of the US labour market will be crucial for investors to model their expectations regarding the next Fed decisions. Powell also mentioned that the banks anticipate below-trend growth and "some" labour market softening to normalise inflation.

The JOLT's Job Opening report will be released on Tuesday, and the ADP Employment Change on Wednesday. The primary week's highlight, the Non-Farm Payrolls (NFP) report, will be released on Friday. New unemployment claims data will be released on Thursday. 

On the CAD front, the week’s highlight will be the S&P Global Manufacturing PMI from July. In the meantime, CAD’s bulls are supported by higher Oil prices as the West Texas Intermediate (WTI) barrel rose to $81.13 and the Brent to $84.88.

USD/CAD Levels to watch

The USD/CAD has a bearish outlook for the short term, per the daily chart. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) hint at a strong bearish momentum. Furthermore, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), implying that the bears retain control on a broader scale.

Support levels: 1.3150, 1.3120, 1.3100.
Resistance levels: 1.3215 (20-day SMA), 1.3250, 1.3270. 

USD/CAD Daily chart