USD/CAD erases gains after US manufacturing data, back to 1.3150
|- US ISM Manufacturing offsets positive NFP report, weight on US Dollar.
- USD/CAD fails one more time at 1.3200, remains above 1.3140.
The USD/CAD pair jumped toward 1.3200 after the release of the US employment report but then reversed and retreat further following the ISM Manufacturing numbers. Recently dropped to 1.3150 and as of writing trades at 1.3160, flat for the day and up a hundred pips from the level, it had a week ago.
Nonfarm Payrolls (NFP) rose by 128K in October, above the 89K expected, and September’s numbers were revised higher from 136K to 180K. The upbeat employment report was later offset by the Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) Index that came in at 48.3 in October, it represents an improvement from September, but it was below market consensus of 48.9. “The US manufacturing sector is in recession due to weak global growth, trade tensions, and a strong dollar. There is little reason to expect an imminent turnaround with more support from the Federal Reserve likely needed”, explained ING analysts.
The Greenback reversed against majors after the Manufacturing report, falling to fresh lows. The DXY drop to test October lows below 97.20, while equity prices in Wall Street extended gains.
Double top in USD/CAD?
The pair again reversed course at the 1.3200 area, showing a potential double top formation. The neckline could be seen around 1.3140. So a consolidation below the mentioned level could target levels under 1.3100. Still, USD/CAD continues to move in the 1.3140/1.3200 range. A break above 1.3200 would signal more gains ahead.
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