Forex Market: USD/CAD daily trading forecast

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Yesterday’s trade saw USD/CAD within the range of 1.0817-1.0909. The pair closed at 1.0876, losing 0.12% on a daily basis.

At 8:01 GMT today USD/CAD was up 0.08% for the day to trade at 1.0883. The pair touched a daily high at 1.0891 during early Asian session.

Fundamental view

United States

Employers in all sectors of economy in the United States, excluding the farming industry, probably added 225 000 new jobs in August, according to the median forecast by experts, after a job gain of 209 000 in July. The non-farm payrolls report presents the total number of US employees in any business, excluding the following four groups: farm employees, general government employees, employees of non-profit organizations, private household employees. The reading, released most often, varies between + 10 000 and as much as + 250 000 at times when economy is performing well. Despite the volatility and the possibility of large revisions, the non-farm payrolls indicator presents the most timely and comprehensive reflection of the current economic state. Total non-farm payrolls account for 80% of the workers, who produce the entire Gross Domestic Product of the United States. In case of a larger-than-expected gain in jobs, the US dollar would receive a boost.

Average Hourly Earnings probably increased 0.2% in August compared to July, after a flat performance in July compared to June.

At the same time, the rate of unemployment in the country probably fell to 6.1% in August, according to the median forecast by experts, from 6.2% in July. It represents the percentage of the eligible work force that is unemployed, but is actively seeking employment. A person who is not classified as employed or unemployed is excluded from the statistics. One counts as unemployed, if he falls in all of the following categories: he/she was unemployed during the last week; he/she is able bodied; he/she has been seeking employment for a period of at least four weeks, which end during the week when the research is conducted. People, who have been laid off and are awaiting to be hired again, are also classified as unemployed. In case the unemployment rate met expectations or even fell further, this would have a bullish effect on the greenback. The Bureau of Labor Statistics will release the official employment data at 12:30 GMT.

Canada

Employment

The number of the employed people in Canada probably increased by 10 000 last month compared to July, according to market expectations. In July compared to June the number of the employed rose by 41 700, or the most since March. Creation of new job positions is considered of utmost importance for consumer spending. In case employment in the country increased more than expected, the loonie would be supported.

The rate of unemployment in the country probably remained unchanged at 7.0% in August. Lower than expected unemployment would have a bullish effect on Canadian dollar. Statistics Canada is expected to release its official report at 12:30 GMT.

Ivey Purchasing Managers Index

Activity among purchasing managers in Canada probably increased in August, with the correspoding seasonally adjusted PMI coming in at a reading of 55.3. In July the index stood at 54.1, or the highest level since April. This indicator is based on a survey sponsored by Richard Ivey School of Business and Canadian Purchasing Management Association. It encompasses 175 respondents in both the public and the private sector, selected in accordance with their geographic location and activity, so that the entire economy is covered. Activity among purchasing managers is closely watched by market players, as managers usually have an early access to data regarding performance of their companies, which could be used as a leading indicator of overall economic activity. Readings above the key level of 50.0 are indicative of expansion in activity. Higher than expected values of the PMI would bolster demand for the loonie. The official reading is due out at 14:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.0867. In case USD/CAD manages to breach the first resistance level at 1.0918, it will probably continue up to test 1.0959. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1010.

If USD/CAD manages to breach the first key support at 1.0826, it will probably continue to slide and test 1.0775. With this second key support broken, the movement to the downside will probably continue to 1.0734.

The mid-Pivot levels for today are as follows: M1 – 1.0755, M2 – 1.0801, M3 – 1.0847, M4 – 1.0893, M5 – 1.0939, M6 – 1.0985.

In weekly terms, the central pivot point is at 1.0894. The three key resistance levels are as follows: R1 – 1.0981, R2 – 1.1084, R3 – 1.1171. The three key support levels are: S1 – 1.0791, S2 – 1.0704, S3 – 1.0601.