FxWirePro: USD/CAD rises above 1.3900 level after Warsh's Jackson hole speech

• USD/CAD rose on Friday as traders increased bets on a Federal Reserve rate hike following comments from Fed Chair Kevin Warsh.

• Fed Chair Kevin Warsh warned at Jackson Hole that further policy action may be needed if inflation remains above target, while acknowledging that financial conditions are not particularly tight.

• • Following Warsh’s comments, the probability of a September rate hike rose to 55.7% from 35.4% on Thursday, according to CME Group’s FedWatch tool.

•Meanwhile data showed, Canadian GDP grew 3.3% annualized in Q2, marking the fastest expansion since 2023 as exports and domestic demand strengthened. Growth then stalled in July, according to an advance estimate.

• The Bank of Canada is widely ​expected to keep interest rates unchanged in September, with traders pricing in a 45.9% chance of a rate hike in December.
               
•  Immediate resistance is located at 1.3908 (SMA 20), any close above will push the pair towards 1.3963(Aug 13th high).

• Support is seen at 1.3889(38.2%fib) and break below could take the pair towards 1.3845(Daily low).

Recommendation: Good to buy around 1.3880  with stop loss of 1.3820 and target price of 1.3950