USDCAD Forecast: Canadian dollar steady ahead of U.S, Canadian employment data

The Canadian dollar is showing little movement in the Thursday session. Currently, USD/CAD is trading at 1.3319, up 0.06% on the day. On the release front, there are employment releases on both sides of the border. Canada will publish ADP Nonfarm Employment Change and Wholesale Sales. In the U.S, Philly Fed Manufacturing Index is forecast to drop to 28.9 points. As well, unemployment claims are expected to edge up to 220 thousand.

With trade tensions making investors increasingly nervous, the Canadian dollar has hit some significant headwinds. USD/CAD has declined 3.0% since June 11 and continues to struggle at 12-month lows. Canada is particularly vulnerable to protectionist moves south of the border, as some 80% of Canadian exports go to the United States. With President Trump making good on his threat to slap tariffs on his trading partners, the Canadian government is scrambling to protect the economy. Trump has said the U.S could impose tariffs of 25 percent on Canadian-built vehicles, which would be disastrous for the Canadian automotive sector, which is worth some C$80 billion to the economy every year. The Trudeau government has promised to help sectors hit with US tariffs, but bailing out the auto industry would cost billions. Canada may have to provide the U.S with more concessions in the NAFTA negotiations, in order to stave off tariffs against Canadian vehicles, which could have a disastrous effect on economic growth.

(Update 1) Onwards and Upwards

Oil falls -2% as OPEC nears deal to raise production

USD/CAD Fundamentals

• 8:30 Canadian ADP Nonfarm Employment Change

• 8:30 Canadian Wholesale Sales. Estimate 0.4%

• 8:30 US Philly Fed Manufacturing Index. Estimate 28.9

• 8:30 US Unemployment Claims. Estimate 220K

• 9:00 US HPI. Estimate 0.3%

• 10:00 US CB Leading Index. Estimate 0.4%

• 10:30 US Natural Gas Storage. Estimate 85B

• Tentative – US Bank Stress Test Results

• All Day – OPEC Meetings

• 8:30 Canadian CPI. Estimate 0.4%

• 8:30 Canadian Retail Sales. Estimate 0.5%

• 8:30 Canadian Core Retail Sales. Estimate 0.0%

Open: 1.3311 High: 1.3330 Low: 1.3294 Close: 1.3319

USD/CAD Technical

USD/CAD ticked higher in the Asian session and has been choppy in European trade

• 1.3292 is a weak support line

• 1.3436 is the next resistance line

• Current range: 1.3292 to 1.3436

Further levels in both directions:

• Below: 1.3292, 1.3160, 1.3067 and 1.2970

• Above: 1.3436, 1.3530 and 1.3637