- USD/CAD traded at three-day lows but recovered later in the session.
- Canada’s mixed employment figures strengthened the loonie.
- US PPI increased the most since November 2010.
The USD/CAD has recovered some of its early losses and is trading at 1.2648, down 0.11% on the day. During the New York session, the pair dipped to a fresh three-day low at 1.2582. However, it staged a rebound, reclaiming 1.2600 amid mixed market sentiment and WTI rising prices. Additionally, the greenback’s performance is improving, with the US dollar index advancing 0.4%, at 92.55.
On the Canadian economic docket, the Unemployment rate fell from 7.5% in July to 7.1% in August, while Canada’s Net Change in Employment rose by 90.2K versus 100K foreseen by economists. Despite the mixed numbers, investors sold the USD/CAD, as the unemployment rate is approaching pre-pandemic levels.
According to National Bank of Canada analysts, the report showed an awe-inspiring job creation despite the uncertainty caused by the COVID-19. “Hiring continued in August at a very impressive pace despite the uncertainty caused by the Delta variant. We are particularly pleased to see that job creation is skewed toward full-time jobs for a second consecutive month, which is positive for wages and economic growth,” NBC said.
In the US, the Producer Price Index came at 8.3% versus 8.2% expected. This was the most significant increase since November 2010. Excluding energy and food, the PPI rose by 6.7%, a tick above the forecast.
The data confirms the rising prices were fed by supply disruptions, shortage of consumer and producer goods, and growing demand related to the pandemic.
Loretta Mester, President of Cleveland’s Federal Reserve, commented that US inflation would remain high in 2021 but it may slow down next year.
USD/CAD Price Forecast: Technical outlook
USD/CAD is trading above the bottom line of an ascending channel in the daily chart. The trend is tilted to the upside. However, a daily close above 1.2663 is needed to maintain the positive bias. If that is achieved, the pair’s first target will be 1.2700. The following supply zones to be tested are the September 8 high at 1.2762 followed by the 1.2800 figure.
On the flip side, failure to close above 1.2663 could exert downward pressure on the pair, exposing the 50-day moving average at 1.2578.
TECHNICAL LEVELS TO WATCH
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.