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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.