Forex Market: USD/CAD daily trading outlook

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 1.4046-1.4172. The pair closed at 1.4105, rising 0.23% on a daily basis, while marking its fourth consecutive trading day of gains. The daily high has been the highest level since July 23rd 2003, when a high of 1.4196 was registered.

At 10:03 GMT today USD/CAD was gaining 0.03% for the day to trade at 1.4111. The pair touched a daily high at 1.4123 during the early hours of Asian trading session and a daily low at 1.4059 during mid-Asian trade. Resistance may be encountered in the area around the high from January 7th (1.4172) and then – at the high from July 23rd 2003 (1.4196). Support may be received at the hourly 21-period EMA (1.4095) and then – in the area around the current daily low (1.4059).

On Friday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.

Fundamentals

United States

Non-farm Payrolls, Unemployment rate, Average Earnings per Hour

Employers in all sectors of economy in the United States, excluding the farming industry, probably added 200 000 new jobs in December, according to the median forecast by experts, after a job gain of 211 000 in November.

Employment rose the most in the sector of construction in November (+46 000). Employment in professional and technical services increased by 28 000, while employers in health care added 24 000 new jobs during the same month. Employment in food services and drinking places continued the uptrend in November (+32 000), as well as employment in retail trade (+31 000). On the other hand, employment in US mining sector continued the downtrend in November (-11 000), according to the report by the Bureau of Labor Statistics (BLS). Employment in other key industries, namely manufacturing, wholesale trade, transportation and warehousing, financial activities, and government, remained little changed during the month.

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 – 300 000 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 in December, demand for the US dollar would be strongly supported.

Average Hourly Earnings probably increased 0.2% in December compared to the prior month, according to market expectations, following another 0.2% surge in November. Average earnings per hour for all employees on private non-farm payrolls reached USD 25.25 in November (up 4 cents compared to October).

The rate of unemployment in the country probably remained at 5.0% for a third consecutive month in December, according to expectations. It has been the lowest level since April 2008, when a rate of 5.0% was reported as well.

The total number of people unemployed was almost unchanged at 7.9 million in November. The unemployment rate for adult men (4.7%), adult women (4.6%), teenagers (15.7%), whites (4.3%), blacks (9.4%), Asians (3.9%), and Hispanics (6.4%) showed little or no change during the month. The number of long-term unemployed (those looking for employment for 27 weeks or more) was almost unchanged at 2.1 million during November and comprised 25.7% of the unemployed, according to the BLS.

In case the unemployment rate met expectations or even fell further, this would have a considerable bullish effect on the US dollar, because of the positive implications for consumer spending. The Bureau of Labor Statistics will release the official employment data at 13:30 GMT.

Canada

Change in employment, Unemployment rate

The number of the employed people in Canada probably increased by 10 000 in December, according to market expectations. In November the number of the employed fell by 35 700, or the most since July 2013, when employed persons were 39 400 fewer. Compared to 12 months earlier, Canadian employment rose by 124 000 (or 0.7%) in November, as the entire gain was due to a surge in full-time employment.

Part-time employment decreased by 72 300 in November, while full-time employment rose by 36 600. The labor force shrank by 23 100 to reach 19 351 700 during the month. Employment was lower for persons aged between 15 and 24, while there was insignificant change in employment numbers regarding the other demographic groups, according to the report by the Statistics Canada.

Meanwhile, the rate of unemployment in the country probably remained at 7.1% for a second consecutive month in December. In October the rate was reported at 7.0%.

A higher-than-expected rate of increase in employment and a drop in unemployment rate would have a strong bullish effect on the local currency. Statistics Canada is expected to release the official employment report at 13:30 GMT.