USD/CAD jumps to highest level since Aug. 10 after ADP and Canadian GDP

Haresh Menghani FXStreet

A better-than-expected US private sector employment growth and disappointing Canadian GDP for Q2 helped the USD/CAD pair to build on to its appreciating move beyond 1.3100 handle.

After an initial drop, the pair resumed its bullish break-out momentum above 200-day SMA and jumped to a hit a fresh 3-week high level, the highest level since August 10.

The release of Canadian GDP came-in to show a better-than-expected monthly economic growth of 0.6% as compared to 0.4% expected. For the second quarter of 2016, Canadian economy contracted by 1.6% annualized rate, faster than -1.5% expected.

Meanwhile, the ADP report showed US private sector added 177k new jobs during the month of August, which was slightly better-than 175k expected but was weaker-than 194k new private sector jobs addition in July. The ADP report is seen as initial estimate of the official non-farm payrolls, which is expected to show a 180k jobs addition in August.

Next on tap would be Chicago manufacturing PMI and pending home sales data.

GMT	Event	Actual	Consensus	Previous
Wednesday, Aug 31
12:15	USD ADP Employment Change	177K	175K	194K Revised from 179K
13:45	USD Chicago Purchasing Managers' Index		54.0	55.8
14:00	USD Pending Home Sales (YoY)			1%

Technical levels to watch

From current levels, the upward trajectory seems to get extended immediately towards 1.3150 intermediate resistance before the pair aims to reclaiming 1.3200 round figure mark. Conversely, only a sustained weakness back below the very important 200-day SMA support near 1.3065-60 would negate the bullish bias and drag the pair back towards 1.3030-20 support ahead of 1.3000 psychological mark.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2852

40% Bullish
60% Bearish
0% Sideways

Bias Bearish

1 Month

Avg Forecast 1.2926

45% Bullish
36% Bearish
18% Sideways

Bias Bullish

1 Quarter

Avg Forecast 1.3178

58% Bullish
0% Bearish
42% Sideways

Bias Bullish

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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