Saturday, March 2, 2024
HomeUncategorizedUSD/CAD rises to highs since early July amid USD strength

USD/CAD rises to highs since early July amid USD strength

  • USD/CAD rose near 1.3340, displaying more than 0.40% gains on the day.
  • ADP showed that the US created more jobs than expected in July.
  • Dropping Oil prices and a negative market sentiment also contribute to the upwards momentum.

On Wednesday’s session, the USD/CAD rose for a second consecutive day, near 1.3340. A stronger Dollar amid hot labour market data from the US and lower Oil prices are the main responsible for the CAD’s weakness.

The US created more jobs than expected in July

The number of employed people in the US was 324,000 in July, according to Automatic Data Processing Inc. (ADP), which was higher than the 189,000 expectations but lower than the revised figure of 455,000 in June. Despite decelerating from its previous reading, it may suggest to the Federal Reserve (Fed) that the sector is still tight and may contribute to inflationary pressures via rising wages. That said, investors will closely look at Nonfarm Payrolls and Average Hourly Earnings data on Friday.

Reacting to the data, the USD strengthened as US yields rose and Wall St indexes dropped. The 2-year yield rose to 4.93% while the S&P 500 (SPX) declined by 1.23% as well as the Dow Jones and the Nasdaq Composite, which are seeing losses of 0.76% and 1.84%, respectively.

In that sense, investors may place bets on a more aggressive Fed. Still, as Chair Powell stated, monetary policy decisions will depend on data, so the labour market on Thursday and Friday will dictate the pace of the markets.

USD/CAD Levels to watch

From a technical standpoint, the USD/CAD maintains a bullish outlook for the short term, as observed on the daily chart. The Relative Strength Index (RSI) is comfortably positioned in the positive territory above its midline. It has a northward slope, complemented by a positive signal from the Moving Average Convergence Divergence (MACD), showing green bars, signalling a growing bullish momentum. Additionally, the pair is above the 20-day Simple Moving Average (SMA) but below the 100 and 200-day SMAs, suggesting that despite the recent bearish sentiment, the bulls are still resilient, holding some momentum.

Resistance levels: 1.3385 (July’s high), 1.3407 (100-day SMA), 1.3455 (200-day SMA).
Support levels: 1.3280, 1.3250, 1.3240.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Read More

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments