USD/CAD forecast: Signal ahead of Canada, US NFP data

By:
on Aug 4, 2023
Listen
  • The USD/CAD exchange rate has jumped in the past few weeks.
  • The Canadian economy is showing signs of slowing down.
  • Economists expect the data to show that US added over 200k jobs.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

The USD/CAD exchange rate continued recovering ahead of the upcoming Canada and US non-farm payrolls (NFP) data. The pair rose to 1.3372, the highest level since July 7th. It has risen by over 2% from its lowest level in July.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

US and Canada jobs data

Copy link to section

The USD/CAD price will be in the spotlight on Friday as the US and Canada publishes their jobs numbers. Economists polled by Reuters expect the data to show that the non-farm payrolls rose by 200k in July after adding 209k in the previous month.

If economists are correct, it means that the labor market is still tight even as the economic slowdown continues. Data published by ADP on Wednesday revealed that the economy added over 300k jobs. Another report showed that number of vacancies dropped in June.

Economists expect the data to show that the unemployment rate remained unchanged at 3.6% in July while the participation rate was 62.6%. Wages are expected to come in at 4.2% from the previous 4.4%.

These numbers will come a week after the Federal Reserve delivered its interest rate decision. In its statement, the bank decided to hike rates by 0.25% to a 22-year high of between 5.25% and 5.5%. Jerome Powell has insisted that the bank will continue being data-dependent.

The USD/CAD will also react to the upcoming Canada jobs numbers. Economists expect the numbers to show that the economy added 21.1k in July after it added 59.9k in the previous month. The unemployment rate is expected to come in at 5.5%.

The Canadian economy is going through headwinds as the manufacturing index remained in a contraction zone of 48.8. Crude oil, one of Canada’s biggest exports, has moved sideways in the past few months.

USD/CAD technical analysis

Copy link to section
usd/cad

USDCAD chart by TradingView

The USD to CAD exchange rate has been in a strong recovery in the past few weeks. It has managed to move to the 50% Fibonacci Retracement level. At the same time, the pair is hovering at the highest point on July 7th. The Relative Strength Index (RSI) has drifted upwards.

Therefore, more gains will also be confirmed if the price moves above the key resistance level at 1.3376. If this happens, the next level to watch will be at 1.3450, the 61.8% retracement level.

Ad

Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
CAD Canada USA USD Forex