On the one hour chart the jobs data resulted in 2 big bearish candles bringing the USD/CAD pair to 0.99565. The pair found support at this level preventing it from further falls.
The US economy posted the producer price index and University of Michigan consumer confidence. The producer price index fell to a seasonally adjusted value of -0.2%. The fall in the producer price index can be attributed to the fall in the crude prices bringing down the energy costs. This fall in the producer prices will likely reflect in the Wholesale price index and filter down into the Consumer Price index, thereby bringing down the inflation. The fall in the inflation will ease the pressure on the Federal Reserve and the Federal Reserve can move ahead with its Quantitative Easing policy should the economy be affected from the slowing growth due to recession fears in the Euro zone. The Consumer confidence in the US rose from the previous value of 76.4 to 77.8 beating analyst’s expectations.
The USD/CAD has slightly recovered from the strong selling seen after the Canadian employment data. The recovery in the USD/CAD is not very strong and is a market reaction to the better than expected consumer confidence and producer price index data.
The USD/CAD is currently trading around the 0.998 level. The trend is in favor of the bears with bearish volatility building up. However the bearish trend is not very strong to cause a major fall in the pair. This is due to a renewed buying interest in the market due to better than expected US fundamentals. Additionally the crude markets are also not in favor of the Canadian dollar and this is damping the outlook of the bears in the USD/CAD.
The USD/CAD is likely to close the week around the 0.99 levels with slight bullishness dominating the trade.
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.