USD/CAD Price Analisis: Bulls gave up following weak US data

USD/CAD peaked at a daily high of 1.3377 and then consolidated at 1.3355, still holding daily gains.
Further Oil production cuts by Saudi prospects lifted prices, favouring the CAD.
Services sectors weakened in July, according to ISM.

Patricio Martín FXStreet

On Thursday’s session, the USD/CAD reversed as the USD lost traction following weak mid-tier economic data. The pair rose to nearly 1.3380 and then settled at 1.3355, while the CAD also benefited from rising Oil prices.

In July, the US Services sector displayed some weakness on the data front but stayed resilient. The S&P index came in at 52.3, lower than the consensus and previous figures of 52.4, while the Institute for Supply Management (ISM) came in at 52.7, failing to live up to the expected 53 and the last 53.9.

Labour market data indicated a slight increase in Jobless Claims to 227,000 at the end of July, as anticipated. However, Unit Labor Costs from Q2 rose by 1.6%, falling short of the expected 2.6% and the previous 3.3%. On Friday, Nonfarm Payrolls (NFPs) will offer investors a clearer outlook on the sector, along with wage inflation and unemployment figures. Overall, data on Thursday showed that the US Services sector remains resilient, but the labour market signals are mixed so NFP data will be closely watched.

On the CAD side, no relevant data will be released by Canada for the rest of the week. Rising Oil prices are giving traction to the Canadian currency, as the West Texas Intermediate (WTI) barrel rose more than 2% to $81.68 on the back of expectations of production cuts by Saudi Arabia in September.

USD/CAD Levels to watch

The technical analysis for USD/CAD on the daily chart suggests a neutral to bearish outlook as the bulls show signs of exhaustion. While the Relative Strength Index (RSI) maintains a negative slope above its midline, the Moving Average Convergence Divergence (MACD) printed neutral green bars. On the other hand, the pair is above the 20-day Simple Moving Average (SMA) but below the 100 and 200-day SMAs, suggesting that despite the recent bearish sentiment, the bulls are still resilient, holding some momentum.

Resistance levels: 1.3385 (July’s high), 1.3405 (100-day SMA), 1.3454 (200-day SMA).
Support levels: 1.3280, 1.3250, 1.3240.

USD/CAD Daily chart

USD/CAD

Overview
Today last price	1.3354
Today Daily Change	0.0004
Today Daily Change %	0.03
Today daily open	1.335

Trends
Daily SMA20	1.3222
Daily SMA50	1.329
Daily SMA100	1.3409
Daily SMA200	1.3458

Levels
Previous Daily High	1.3354
Previous Daily Low	1.3266
Previous Weekly High	1.3255
Previous Weekly Low	1.3147
Previous Monthly High	1.3387
Previous Monthly Low	1.3093
Daily Fibonacci 38.2%	1.332
Daily Fibonacci 61.8%	1.3299
Daily Pivot Point S1	1.3293
Daily Pivot Point S2	1.3236
Daily Pivot Point S3	1.3205
Daily Pivot Point R1	1.3381
Daily Pivot Point R2	1.3411
Daily Pivot Point R3	1.3469

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.