USD/CAD: Bulls attack 1.3600 with a little firepower ahead of US NFP
- USD/CAD extends Wednesday’s recovery moves from 1.3546.
- WTI remains sluggish below $40.00, trading sentiment also struggles for clear directions.
- Virus woes prevail, US and China stay at loggerheads but markets stay cautious before the US NFP.
USD/CAD prints mild gains of 0.10% while taking the bids near 1.3600 during the early Thursday. In doing so, the loonie extends the previous day’s pullback from the one-week low.
The US dollar’s pause after three days of declines might have helped the pair to extend the recent upside. That said, the US dollar index (DXY), a gauge of major currencies versus the greenback, currently takes rounds to 97.15. Though, the US currency traders are likely being cautious ahead of the key Nonfarm Payrolls (NFP) data.
In doing so, the quote seems to be ignoring the recent shift in the risk-tone, though a mild one, while also paying a little heed to the WTI repeated attempts to cross $40.00. The energy benchmark bears the burden of expected depletion in demand due to the coronavirus (COVID-19) outbreak and the Sino-American tussle off-late.
As per the latest updates from Reuters, the virus cases rose by more than 48,000 on Wednesday, which in turn marks the biggest daily increase since pandemic started. Other than the US, worsening situations in Australia and some parts of Asia also weigh on the risk-tone sentiment. Additionally, the US Senate’s passage of sanction on the diplomats from Beijing, due to the Hong Kong security law, joins American Secretary of State Mike Pompeo’s push for Hong Kong’s freedom to sour the mood further.
Having said that, the US 10-year treasury yields stop the previous run-up towards 0.70%, around 0.68%, while the US stock futures and Japanese shares also dwindle as we write.
Looking forward, the US employment report for June becomes the key to watch amid the recent fears that wave 2.0 will offer fresh challenges to the American jobs. Even so, market forecasts an increase of 3,000K in the headline Nonfarm Payrolls (NFP) while Unemployment Rate could also ease from 13.3% to 12.3%.
Read: US Non-Farm Payrolls June Preview: The delicate art of prediction
Other than the US NFP, Canadian trade numbers and the US Factory Orders might also entertain the pair traders.
Technical analysis
The pair’s failure to extend the downtick below 200-day EMA, presently around 1.3580, suggests further recoveries towards 1.3700 round-figures comprising 100-day EMA.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
