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USD/CAD at the mercy of US jobs data this week

  • USD/CAD consolidates ahead of critical US jobs data. 
  • Markets will now assess the economic backdrop with respect to Fed rate hike timings.

USD/CAD is flat on the day and in the consolidation of the prior daily bearish impulse after a being outcome from the Federal reserve that weighed on the greenback in what was giving back territory gained earlier in the week. Investors weighed the Federal Reserve's move to taper its bond-buying program, with CAD recovering from an earlier three-week low which it hit as oil prices tumbled.

There was a limited reaction across the G10FX space following the Fed meeting after it said it will begin trimming its monthly bond purchases in November with plans to end them in 2022, but held to its belief that high inflation would prove "transitory" and likely not require a fast rise in interest rates.

All eyes now turn to data events

However, as for liftoff, it will now depend on how the economy evolves, so US data is going to be critical and volatility could be sparked as soon as today with JOLTS ahead of Friday's all-important Nonfarm Payrolls. 

''Officials have become more concerned about the risk that the pickup in inflation will turn out to be less "transitory" than hoped, raising the risk of an earlier-than-anticipated start to rate hikes, but officials still think inflation will moderate as COVID fallout wanes,'' analysts at TD Securities explained. 

''We continue to forecast no rate hikes until the end of 2023, but the exact timing will inevitably depend on how the outlook evolves as data are reported. We expect a fading of fiscal stimulus to the point of policy turning contractionary to result in momentum be down enough by the middle of next year to delay action.''

Meanwhile, as a potential prelude to Friday's jobs data, the US ADP private employment report surprised to the upside in October. The series rallied to 571k after registering a 523k gain in September (revised lower from 568k).

USD/CAD

Overview
Today last price1.2393
Today Daily Change0.0002
Today Daily Change %0.02
Today daily open1.2391
 
Trends
Daily SMA201.2399
Daily SMA501.2555
Daily SMA1001.2533
Daily SMA2001.2485
 
Levels
Previous Daily High1.2458
Previous Daily Low1.2381
Previous Weekly High1.2432
Previous Weekly Low1.23
Previous Monthly High1.2739
Previous Monthly Low1.2288
Daily Fibonacci 38.2%1.241
Daily Fibonacci 61.8%1.2428
Daily Pivot Point S11.2362
Daily Pivot Point S21.2334
Daily Pivot Point S31.2286
Daily Pivot Point R11.2438
Daily Pivot Point R21.2486
Daily Pivot Point R31.2514

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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