Yesterday we mentioned how the fall of USDCAD intensified on the back of Canadian employment numbers being better than expected by the analysts. There were 378.2K new jobs (150K expected) and the unemployment rate was a positive surprise at 9% instead of 9.8% prediction by the analyst consensus. Now the news is that supply in crude oil is increasing again and the pair has consolidated and moved outside of the descending regression channel. So the question is: are the buyers starting to get interested in USDCAD? By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

USDCAD has retraced practically all of the up move  it made after our analysis in September. We suggested at the time that it’d be likely to see the pair moving higher. Now there are signs of downside momentum loss. In order for a market to reverse a downtrend, it needs to violate the latest resistance. In this case, the latest key resistance level is at 1.3143. This would make it likely that the pair moves to our T1 and T2. Technical weakness (a rejection candle) at this resistance has moved the price lower at the time of writing this is a negative for the bulls and could lead to further price depreciation. For more analysis on this and other markets, go to tiomarkets.com/analysis and don’t forget to subscribe to TIOmarkets YouTube channel.

If price continues lower and breaks the 1.3097 support (yesterday’s low) then next key support is the September 1st low at 1.2994. Should that happen, the current sideways move could become a resistance. However, Reuters reports today that crude supply has begun to resume in Norway, the US Gulf of Mexico and Libya, this could put more pressure on the oil price. Supply increases in crude oil are obviously a risk for those considering long CAD trades. Therefore, USDCAD long trade idea has some fundamental support but at the same time, we want to see price action supporting the fundamentals. We are looking for buy signals above 1.3097.

Today’s US CPI numbers could move the market too. Check the TIOmarkets economic calendar for the release time in your timezone.

Recent macroeconomic data releases

  • Canada Manufacturing PMI, 56
  • US ISM Manufacturing PMI, 55.4, 56 expected
  • US Average Hourly Earnings, 0.1%, 0.5% expected
  • US Non-Farm Employment Change, 661K, 900K expected
  • US Unemployment rate, 7.9%, 8.2% expected
  • Australia NAB Business Confidence, -4, -8 previous
  • EU Retail Sales,4.4%, 2.4% expected
  • US ISM Non-Manufacturing PMI, 57.8, 56.3 expected
  • Australian Cash Rate, 0.25%, 0.25% expected
  • Canadian Trade Balance, -2.4B, -2.1B expected
  • FOMC Meeting Minutes
  • US Unemployment Claims, 840K, 820K expected
  • Canada Employment Change, 378.2K, 150K expected
  • Canada Unemployment Rate, 9%, 9.8% expected.

Macroeconomic data releases today

  • UK Claimant Count Change, 28.1K, 39.5K expected
  • US CPI, 0.2% expected
  • US Core CPI, 0.2% expected

You may access the times and dates in the economic calendar here.

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Janne Muta
Chief Market Analyst
TIOmarkets.com

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Janne Muta
Author

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