- USD/CAD remains supported above 1.3550 awaiting US ADP labor demand data.
- If the employment change data replicates the behavior of job offers, the selling pressure on the USD Index would increase.
- The Asset moves sideways after a sell-off near the 200 EMA.
The USD/CAD pair pulls back after a brief pullback move to near 1.3577 in the European session. The pair remained broadly sideways on Wednesday as investors stayed on the sidelines ahead of US employment change data for August to be reported by Automatic Data Processing (ADP).
In line with expectations, the US private sector posted new additions of 195,000, which was significantly lower than the July reading of 324,000. The job vacancy data released on Tuesday was bearish and ended up putting significant pressure on the Dollar Index (DXY). If the Changes in Employment data replicates the behavior of Job Offers, the selling pressure on the Dollar Index would increase and it could enter a bearish trajectory.
This week, the Canadian dollar will dance to the sound of the second quarter Gross Domestic Product (GDP) data. Investors expect the growth rate for the April-June quarter to be lower than the growth rate for the first quarter due to upside risks to interest rates from the Bank of Canada (BoC).
USD/CAD discovered selling pressure after a double top formation on the hourly scale, indicating that investor bidding was not enough when attempting a break above the August 25 high at 1.3640. The pair turns sideways after a sell-off move near the 200 EMA, which sits around 1.3560.
A break in the bearish 20.00-40.00 range of the Relative Strength Index (RSI) (14) will trigger bearish momentum.
Going forward, a move below the Aug 29 low at 1.3550 will expose the pair to the Aug 24 low at 1.3510, followed by the Aug 9 high at 1.3454.
In an alternate scenario, a strong recovery above the Aug 25 high at 1.3640 will drive the asset towards a Mar 28 high around 1.3700 and a Mar 27 high of 1.3745.
USD/CAD hourly 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.
