Usdcad rises amid mixed US economic data and anticipation of nonfarm payroll report

USDCAD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.24%	31.9 Pips
Week to-date	0.28%	37.2 Pips
October	0.17%	23.3 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, the economic data presents a mixed picture. According to the Census Bureau, there was a decrease of 0.2% in new orders for manufactured goods in August, which marks a significant slowdown from the revised figure of 4.9% observed in July. This decline in manufacturing orders indicates a potential weakening in industrial activity, which could signal challenges for economic growth if the trend persists. Furthermore, as reported by the Department of Labor, the initial unemployment insurance claims rose to 225,000 for the week ending 28 September, surpassing the previous figure of 219,000. An increase in unemployment claims suggests a softer job market, which might indicate economic headwinds as businesses adjust to prevailing uncertainties. However, an upcoming high-impact event is the USD Nonfarm Payroll Employment data scheduled to be released, which will offer a clearer indication of the labor market’s strength and economic trajectory.

The recent economic indicators from the U.S. have implications for the USDCAD exchange rate. The rise of USDCAD by 0.24% to 1.35460 can be partially attributed to the perception of weakening economic data in the U.S., which might lead to speculation that the Federal Reserve could adopt a more dovish stance if economic indicators consistently weaken. The potential impact on the Canadian dollar is also influenced by fluctuations in oil prices, as Canada is a major oil exporter. The weakening manufacturing orders and rising jobless claims could apply pressure on the U.S. dollar, but market participants will be closely watching the upcoming Nonfarm Payroll Employment for further direction. If the payroll data reflects robust job growth, it may counter some of the negative sentiments from the latest data, potentially strengthening the U.S. dollar and influencing USDCAD towards appreciation.

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What can we expect from USDCAD today?

USDCAD on Thursday rose 0.24% to 1.35460. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks bullish as the pair ended higher after Thursday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.35708 with break above could target R2 at 1.35956 or figure level area. While towards the downside, we are looking at daily low of 1.34990 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.35597 may suggest continuation after recent positive movement.

For the week to-date, take note that USDCAD is bullish as the pair continued to trade higher and is up by 0.28% over the past few days.

Key levels to watch out:

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