USD/CAD edges lower around 1.2500 on oil price rebound, focus on employment
|- USD/CAD stays pressured after snapping four-day uptrend the previous day.
- Market optimism, upbeat data keep sellers hopeful amid oil’s recovery.
- July’s job figures from the US, Canada become the key, risk catalysts are important too.
USD/CAD seesaws in a choppy range surrounding 1.2500, fading the previous day’s bounce off 1.2469, during Friday’s Asian session. The loonie pair dropped for the first time in five days on Thursday after upbeat market sentiment helped oil prices. However, the pair traders turn cautious ahead of today’s key employment data from the US and Canada.
Be it US Senator’s optimism to pass the infrastructure spending bill or hopes of tackling debt limit challenge, not to forget positive surprise from US jobless claims, risk appetite had reasons to improve.
Also weighing on the pair could be the upbeat prints of the Canadian trade numbers for June, $+3.23B versus $-0.68B expected and $-1.58B revised prior.
On the contrary, a higher trade deficit in the US, $-75.71B versus $-74.1B forecast and $-71B prior, as well as tapering tantrums and covid woes, were challenging the USD/CAD sellers.
Above all, cautious sentiment ahead of today’s July month’s employment data from both nations keep USD/CAD traders on the edge.
Amid these plays, Wall Street marked a positive daily performance and the US Treasury yields jumped the most in 12 days. Further, WTI oil prices took a U-turn from a 12-day low, around $69.00 by the press time.
Looking forward, the pre-data trading lull may keep USD/CAD traders worried. Though, risk catalysts may offer intermediate moves.
Forecasts suggest the Canadian employment data come in a bit softer than their US counterpart and hence the USD/CAD prices may witness an uptick if matching expectations.
Read: Canada Net Change in Employment July Preview: Can we get some respect here?
Technical analysis
USD/CAD battles an ascending support line from June 23, near 1.2490, while staying below 21-DMA and 200-DMA, respectively around 1.2540 and 1.2580. It’s worth noting that the bearish MACD and Momentum favor the pair sellers.
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