CAD in focus amid USD strength

Frank Walbaum

lmportant news this week:

Fri, 10th, 14:30 CET CA Unemployment Claims

CAD employment report takes center stage

Today's Canadian employment report is the key event for FX markets. Following recent mixed economic data, traders are watching whether another soft labor market reading could put additional pressure on the Canadian Dollar. Technicals currently favor further upside in USDCAD, with the pair maintaining a constructive short-term outlook. At the same time, the US Dollar is showing signs of strengthening on the shorter-term charts, which could add further support if today's data disappoints.
EURUSD also remains in focus. A firmer US Dollar could trigger another leg lower in the pair, particularly as there are few major catalysts elsewhere in the market. Equity markets continue to recover and appear capable of pushing toward fresh highs, supported by resilient earnings expectations and improving risk appetite. Oil prices, however, have surrendered their recent gains once again, reducing inflation concerns but offering little support for commodity-linked currencies such as the Canadian Dollar. In the UK, Sterling remains one of the stronger major currencies, with the EURGBP short trade continuing to develop in line with expectations after protective stop-loss levels were adjusted.

Market talk

With little else on today's economic calendar, the Canadian employment report is likely to dominate market sentiment. A weak labor report could accelerate gains in USDCAD and reinforce the broader bullish outlook for the US Dollar. Equity markets remain constructive despite trading near resistance, while lower oil prices continue to remove inflation pressure from global markets. Attention will then gradually shift toward upcoming US inflation data and central bank expectations, which are likely to determine the next broader move across FX, equities, and commodities.

Tendencies in the markets

Equities positive, USD stronger, BTC positive, oil lower, Silver sideways, Gold sideways.

Author

Frank Walbaum

GBP/USD: Daily gains remain capped by 1.3650

GBP/USD leaves behind Monday’s pessimism and advances marginally on Tuesday. Cable’s humble gains, however, appear to have met quite a decent resistance in the 1.3650 zone for now, in a context of a slight selling pressure hovering around the Greenback.

EUR/USD struggles to regain pace; gyrates around 1.1670

EUR/USD clinches humble gains around 1.1670 following Tuesday’s close on Wall Street. Indeed, marginal losses in the US Dollar encourages spot to set aside two dauly pullbacks in a row and maintain the 1.1700 barrier on the cross-hairs for now. Moving forward, US inflation tracked by the PCE and another revision of Q2 GDP data should keep investors entertained on Wednesday.

$4700 back on Gold buyers’ radar as US core PCE inflation data looms

Gold is heading back toward the fresh 15-week highs of $4,697 in Wednesday’s Asian trades, reversing a brief dip below the $4,650 level. Gold buyers find renewed strength from a broadly subdued US Dollar (USD), as they look to reposition ahead of the US core Personal Consumption Expenditures (PCE) Price Index data for July.

Bitcoin pauses near $80,000, Ethereum at $2,500, XRP below $1.50

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are facing downside pressure near key psychological thresholds as last week's double-digit rally loses momentum. The pullback reflects near-term corrective measures as traders book profits. Bitcoin trades near $78,760 at press time on Wednesday, maintaining its bullish bias after last week's 23% rally.

America’s self‑inflicted trade wound

I’m conflicted about the trade war that the U.S. has started with Canada. Let’s be clear: any representation that Canada has been taking unfair advantage of the U.S. or that they have been treating us badly for years is a bogus characterization. In reality, the shoe is on the other foot. It’s the U.S. that has been behaving badly.

Canada hits US goods with tariffs; The rate market sees a problem

On September 8, Canada begins charging its own importers 15%, 25% and 50% on roughly 700 lines of American goods. The measure is billed as dollar for dollar, and on the arithmetic of covered trade it is. What it is not is a tax on the United States.