USD/CAD stays in tight range above 1.30 ahead of PMI data
|- ADP data shows a higher-than-expected increase in private sector payrolls.
- Markit Manufacturing PMI in Canada and the U.S. will be released next.
- US Dollar Index treads water near mid-94s ahead of FOMC.
The USD/CAD pair failed to make a firm in either direction even after the monthly ADP data showed a robust increase in private sector payrolls in the United States. As of writing, the pair was trading at 1.3013, adding 0.05% on the day.
On a monthly basis, the private sector employment increased by 219K in July to beat the market expectation of 185K. Moreover, the June reading got revised up to 181K from 177K. "The job market is booming, impacted by the deficit-financed tax cuts and increases in government spending," the ADP said and added that there was no material impact from tariffs yet but multinational companies "shed jobs last month, signaling the threat."
Later in the session, Markit is going to publish the Manufacturing PMI report in Canada and the U.S. The ISM is also scheduled to release its respective PMI data in the U.S. However, markets are likely to stay quiet before the FOMC announces its interest rate decision and publish the monetary policy statement. “It is one of the small meetings without updated projections or any press conference. The only piece of information we will get is the statement, but it does not change much from meeting to meeting,” Danske Bank analysts argue.
Technical outlook
The pair could encounter the first support 1.3000 (daily low/psychological level) ahead of 1.2970 (100-DMA) and 1.2920 (Jun. 8 low). On the upside, resistances are located at 1.3090 (Jul. 26 high), 1.3130 (20-DMA/50-DMA) and 1.3200 (psychological level).
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