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USD/CAD Overview & Technical Analysiss

Fundamental Summary

USD

The BLS report on Friday shows figures that are worse than forecast. In August, total nonfarm payroll employment increased by 315,000, while the unemployment rate rose to 3.7%. A rate that is higher than expected should be interpreted as negative/bearish for the USD. Also, The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose from 49.9 to 54.2 in August, exceeding market forecasts. The Manufacturing Purchasing Managers' Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. Furthermore, according to payroll processor ADP, private sector hiring slowed in August due to a cooling of the labor market. As part of a revamped monthly report, the company said that private payrolls rose by 132,000 during the month, far below the consensus forecast of 300,000.

CAD

According to Statistics Canada, actual Building Permits were down by -6.6%, compared to a -0.5% estimate. Building Permits track the number of new building permits issued by the government and are a crucial indicator of housing market demand. Additionally, as estimated, Canada's GDP climbed in June by 0.1%, with real GDP increasing by 0.8% in the second quarter of this year. The Canadian economy increased at a 3.3% annual rate in the second quarter which was less than experts' expectations. Moreover, according to Statistics Canada, the country's current account surplus was C$2.7 billion in the second quarter, falling short of the C$6.6 billion predicted by analysts.

Our Opinion

Given the current balance of positive and negative influences affecting the USD/CHF and as long as the Fed maintains its aggressive policy and cyclical worries put pressure on risky assets, the fundamental outlook for the USD is "BEARISH" and for the CAD is "BEARISH".

Technical Analysis

The USD/CAD pair is trading in a tight range of 1.3140-1.3160, close to the 7-week high. The USD/CAD is continuing trading above the MA (200) H1 moving average line (1.3030) on the hourly chart. Based on the above, it is probably worthwhile to trade in the north direction, and as long as the USD/CAD continues above MA 200 H1, it may be essential to hunt for entry opportunities to purchase in anticipation of the development of a correction. A rise over 1.3060 caused sellers to cover their wagers, paving the way for longer-term recovery. A sequence of higher lows suggests that there is strong interest in driving the greenback back to July's peak of 1.3220, where a bullish breakout might restart the uptrend in the coming weeks. The RSI's overbought status may limit the range's upward potential for the time being. The first level to test bids is the Pivot level at 1.3100.

Bearish 57
Close Price 216.3
52W Low 157.0
52W High 292.55
5D MA 215.82
50D MA 195.76
200D MA 216.62
MACD 5.53
RSI 77.16
STOCH 80.91

This report, prepared and provided by Deshe Labs Ltd ("Deshe"), is intended for general guidance and information purposes only and under no circumstances is tailored to a specific factor or variable related to its reader or intended to be used, construed, or considered as financial or investment advice, an offer, a solicitation of any offer, a recommendation, or an offer to invest in, sell or buy the securities mentioned in this report or other form of a financial asset or as a marketing communication under FCA Rules. For the full disclaimer, click here.