- USD/CAD reached a daily high of 1.3377 and then consolidated at 1.3355, still holding holdings.
- The prospects of further cuts in oil production by Saudi Arabia pushed up prices, favoring the CAD.
- The service sector weakened in July, according to the ISM.
In Thursday’s session, the pair USD/CAD suffered a reversal as the dollar lost traction on weak mid-level economic data. The pair rose to almost 1.3380 and then settled at 1.3355, while the CAD also benefited from higher oil prices.
In July, the US services sector showed some weakness in the data, but held firm. The S&P Index came in at 52.3, below consensus and previous figures of 52.4, while the Institute for Supply Management (ISM) came in at 52.7, below 53 expected and 53.9 previously.
Labor market data indicated a slight increase in jobless claims to 227,000 at the end of July, as anticipated. However, second quarter unit labor costs rose 1.6%, below the 2.6% expected and 3.3% previously. Non-Farm Payrolls (NFP) will give investors a clearer picture of the sector on Friday, along with wage inflation and unemployment figures. Overall, Thursday’s data showed that the US service sector remains resilient, but labor market signals are mixed, so NFP data will be closely watched.
On the CAD side, Canada will not release relevant data for the rest of the week. Rising oil prices are driving the Canadian currency as West Texas Intermediate (WTI) a barrel rose more than 2% to $81.68 on expectations of production cuts from Saudi Arabia in September .
USD/CAD levels to watch
Technical analysis for USD/CAD on the daily chart suggests a neutral to bearish picture as the bulls show signs of exhaustion. While the Relative Strength Index (RSI) maintains a negative slope above its midline, the Moving Average Divergence (MACD) creates neutral green bars. On the other hand, the pair is above the 20-day SMA but below the 100- and 200-day SMAs, which suggests that despite the recent bearish sentiment, the bulls are still holding out and They maintain some momentum.
Resistance levels: 1.3385 (July high), 1.3405 (100-day SMA), 1.3454 (200-day SMA).
Support levels: 1.3280, 1.3250, 1.3240.
USD/CAD Daily Chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
