USD/CAD forecast: Signal ahead of Canada, US NFP data

August 04, 2023 04:30 AM PDT | By Invezz

USD/CAD forecast: Signal ahead of Canada, US NFP data — Image source: Invezz

US and Canada jobs data

The USD/CAD price will be in the spotlight on Friday as the US and Canada publishes their jobs numbers. Economists polled by Reuters expect the data to show that the non-farm payrolls rose by 200k in July after adding 209k in the previous month.

If economists are correct, it means that the labor market is still tight even as the economic slowdown continues. Data published by ADP on Wednesday revealed that the economy added over 300k jobs. Another report showed that number of vacancies dropped in June.

Economists expect the data to show that the unemployment rate remained unchanged at 3.6% in July while the participation rate was 62.6%. Wages are expected to come in at 4.2% from the previous 4.4%.

These numbers will come a week after the Federal Reserve delivered its interest rate decision. In its statement, the bank decided to hike rates by 0.25% to a 22-year high of between 5.25% and 5.5%. Jerome Powell has insisted that the bank will continue being data-dependent.

Watch here: https://www.youtube.com/embed/ffDKAqTlWMA?feature=oembed

The USD/CAD will also react to the upcoming Canada jobs numbers. Economists expect the numbers to show that the economy added 21.1k in July after it added 59.9k in the previous month. The unemployment rate is expected to come in at 5.5%.

The Canadian economy is going through headwinds as the manufacturing index remained in a contraction zone of 48.8. Crude oil, one of Canada’s biggest exports, has moved sideways in the past few months.

USD/CAD technical analysis

USDCAD chart by TradingView

The USD to CAD exchange rate has been in a strong recovery in the past few weeks. It has managed to move to the 50% Fibonacci Retracement level. At the same time, the pair is hovering at the highest point on July 7th. The Relative Strength Index (RSI) has drifted upwards.

Therefore, more gains will also be confirmed if the price moves above the key resistance level at 1.3376. If this happens, the next level to watch will be at 1.3450, the 61.8% retracement level.

The post USD/CAD forecast: Signal ahead of Canada, US NFP data appeared first on Invezz.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.