|

USD/CAD copies Oil’s inaction near mid-1.3400s, Canada employment, early signals for US inflation eyed

  • USD/CAD pauses two-day uptrend but remains sidelined amid cautious markets.
  • Oil price struggles amid recession woes, softer US Dollar.
  • Canada employment data will be crucial after BoC’s Macklem teased a pause in rate hikes.
  • Preliminary readings of US Michigan Consumer Sentiment, 5-year inflation expectations eyed to forecast next week’s US inflation data.

USD/CAD aptly portrays the pre-data anxiety as it seesaws around 1.3450 during early Friday, after a two-day uptrend, as traders await the key statistics from Canada and the US. In doing so, the Loonie pair also takes clues from the idle Oil price.

Other than the pre-data caution, the mixed sentiment in the market also challenges the USD/CAD pair traders as the recession woes contrast with softer US data and downbeat Fedspeak.

It should be noted that the WTI crude oil remains indecisive around $78.00, after reversing from a one-week high. That said, the recently softer China inflation numbers and recession woes seem to challenge the energy benchmark even as the softer US Dollar underpin the bullish bias.

On Thursday, a negative difference between the US 10-year and 2-year Treasury bond yields amplified the recession woes as the yield curve inversion jumped to the widest since 1980. It’s worth noting that both these key bond yields remain mostly inactive around 3.67% and 4.49% respectively by the press time.

On the other hand, the downbeat prints of the US Weekly Initial Jobless Claims, which rose to 196K versus 190K expected and 183K prior, joined comments from Richmond Federal Reserve (Fed) President Thomas Barkin to weigh on the US Dollar. Fed’s Barkin appeared too dovish while suggesting rate cuts as he said that it would make sense for the Fed to steer "more deliberately" from here due to lagged effects of policy. Previously, Fed Chair Jerome Powell hesitated in cheering the upbeat US jobs report and raised fears of no more hawkish moves from the US central bank.

Amid these plays, S&P 500 Futures struggle for clear directions even as Wall Street closed with losses.

Moving on, Canada employment data for January will be important after Bank of Canada (BoC) Governor Tiff Macklem teased a pause in the rate hike. Additionally, the early signals for the next week’s US inflation data, namely preliminary readings of the United States consumer-centric numbers for February like the Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations will be crucial for clear directions.

Forecasts suggest downbeat prints of Canada jobs reports contrasting the US data, which in turn can propel the USD/CAD pair.

Technical analysis

Despite repeatedly bouncing off the 21-DMA, around 1.3390 by the press time, the USD/CAD remains off the bull’s radar unless staying below the 50-DMA hurdle of 1.3495.

Additional important levels

Overview
Today last price1.3458
Today Daily Change-0.0003
Today Daily Change %-0.02%
Today daily open1.3461
 
Trends
Daily SMA201.3388
Daily SMA501.3495
Daily SMA1001.3536
Daily SMA2001.3234
 
Levels
Previous Daily High1.3463
Previous Daily Low1.3373
Previous Weekly High1.3472
Previous Weekly Low1.3262
Previous Monthly High1.3685
Previous Monthly Low1.33
Daily Fibonacci 38.2%1.3429
Daily Fibonacci 61.8%1.3407
Daily Pivot Point S11.3401
Daily Pivot Point S21.3342
Daily Pivot Point S31.3311
Daily Pivot Point R11.3492
Daily Pivot Point R21.3523
Daily Pivot Point R31.3583

Author

Anil Panchal

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.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD sits at three-week highs above 0.7000 on hawkish RBA-speak

AUD/USD holds a positive bias for the fourth straight day, trading above 0.7000 in the Asian session on Wednesday and at three-week highs. RBA Deputy Governor Andrew Hauser's hawkish remarks and inflation concerns underpin the pair. However, the upside appears capped as the US Dollar attracts some buyers amid looming US-Iran uncertainty.

USD/JPY remains confined in a familiar range below 158.50

USD/JPY sees some dip-buying in the Asian session on Wednesday, though it remains confined within a multi-week range near 158.50 as the uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. Meanwhile, hawkish Fed expectations, bolstered by inflation risks stemming from volatile oil prices, underpin the US Dollar. However, looming intervention fears could limit JPY losses and cap the currency pair.

Gold appears slightly bid above $4,100

Gold prices manage to reverse three consecutive daily declines, trading just above the $4,100 per troy ounce on Wednesday. The yellow metal’s recovery comes amid a humble advance in the US Dollar, mixed US Treasury yields across the board and a widespread cautious tone from the US-Iran front.

Bitcoin eyes a break above $85,000 as institutional demand returns

Bitcoin edges higher above $83,000, extending its rebound from the 50-day EMA near $80,786. US-listed BTC spot ETFs recorded over $23 million in net inflows on Tuesday, following Monday's $526 million, signaling a return of institutional demand.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.

The US Dollar fell. Gold didn't rally. That tells you everything
Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.