USD/CAD soars to multi-week highs amid hawkish bets on the Fed

USD/CAD rose more than 0.60% on Thursday towards the 1.3370 level.
ADP and ISM Service data from the US fueled a rising in US bond yields.
Eyes on Canadian and American employment data on Friday.

Patricio Martín FXStreet

The USD/CAD gained momentum in Thursday’s session and jumped to its highest since mid-June to 1.3370. On the other hand, the DXY index still trades in the red but cleared some daily losses, trading at the 103.10 area.

According to the Employment Change report from Automatic Data Processing, Inc., the US economy added 497K new jobs in June, surpassing expectations of 228K and showing an increase from the previous month's figure of 278K and fueling hawkish bets in the Federal Reserve (Fed).

It's worth mentioning that at the European Central Bank (ECB) forum in late June, Chair Powell from the Fed warned that a tight labour market could justify additional hikes, so ADP figures support a more aggressive stance from the Fed. That being said, Nonfarm Payrolls (NFPs) figures, expected to increase by 225K (previous 339K), will be the highlight of Friday’s session, providing additional information to markets regarding the US labour market.

Canada will also release labour market data. The Net Employment change is expected to come in at 20k from its previous figure of -17.3K, while Average Hourly Earnings to expand by 0.3% MoM and the Unemployment rate to rise to 5.3% from its prior 5.2%.

USD/CAD Levels to watch

The daily chart suggests that the USD/CAD’s outlook has turned neutral to bullish for the short term. In that sense, technical indicators are gaining ground, with the Relative Strength Index pointing north and jumping to positive territory and the Moving Average Convergence Divergence (MACD) printing green bars. However, the pair still has some work to do as it trades below the 100- and 200-day Simple Moving Averages (SMAs).

Resistance Levels to watch: 1.3380, 1.3390, 1.3340.
Support Levels to watch: 1.3280, 1.3250 (20-day SMA), 1.3220.

USD/CAD Daily chart

USD/CAD

Overview
Today last price	1.3363
Today Daily Change	0.0082
Today Daily Change %	0.62
Today daily open	1.3281

Trends
Daily SMA20	1.3247
Daily SMA50	1.3402
Daily SMA100	1.3491
Daily SMA200	1.3507

Levels
Previous Daily High	1.3293
Previous Daily Low	1.322
Previous Weekly High	1.3285
Previous Weekly Low	1.3117
Previous Monthly High	1.3585
Previous Monthly Low	1.3117
Daily Fibonacci 38.2%	1.3265
Daily Fibonacci 61.8%	1.3248
Daily Pivot Point S1	1.3236
Daily Pivot Point S2	1.3192
Daily Pivot Point S3	1.3163
Daily Pivot Point R1	1.3309
Daily Pivot Point R2	1.3338
Daily Pivot Point R3	1.3382

Author

Patricio Martín

FXStreet

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

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.