Wobbling Around 1.26 After ADP, Looking NFP Ahead
- US employers created 374,000 jobs in August, according to the Automatic Data Processing Research Institute (ADP).
- A moderate decline in US Treasury yields could have been attributed to investors’ doubts about when the Fed would leave the market.
- In the near term, traders will look for opportunities in the wake of the OPEC+ meeting and oil prices.
The USD/CAD analysis looks bearish, as the price remains rangebound around 1.2600. The US dollar halts recovery after dismal US ADP figures.
The USD/CAD pair is trading at 1.2615, up 0.01% on Wednesday, at the time of writing.
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The USD/CAD pair remained at the bottom of its weekly range in the region of 1.2585-80, failing to rebound after a disappointing ADP report in the US.
US employers created 374,000 jobs in August, according to the Automatic Data Processing Research Institute (ADP). Following a drop in the previous month to 326,000, this figure was well below the consensus of 613,000.
Accordingly, a moderate decline in US Treasury yields could have been attributed to investors’ doubts about when the Fed would leave the market. This weakened the US dollar, which reversed its modest daily gains and became an obstacle for the USD/CAD pair.
It was difficult for the pair to capitalize on the previous day’s modest rebound or gain acceptance above 1.2600 on Wednesday as new offers appeared. As oil prices rose modestly, the downturn was driven by higher demand for commodity-denominated Canadian dollars. The bulls did not seem impressed by the modest appreciation of the US dollar.
Further, sentiment in equity markets continued to be positive, indicating a prevailing risk appetite. The rise in crude oil prices, on the other hand, provided some support for the Canadian dollar, which is pegged to commodities, and influenced further the proposed tone of the USD/CAD pair.
The US Manufacturing PMI came slightly better than expected but could not impress the Greenback bulls. This, combined with the yield on US bonds, could affect the US dollar and drive the USD/CAD pair higher. In the near term, traders will look for opportunities in the wake of the OPEC+ meeting and oil prices.
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USD/CAD price technical analysis: Locked in 20 and 200 SMAs
The USD/CAD price is sandwiched between 20-period and 200-period SMAs on the 4-hour chart. Although the volume for the recent bar surged, the close of the bar may be off the highs. This is an indicator of weak bulls. On the downside, 1.2570 ahead of 1.2550 are the key support zones. On the upside, 1.2650 and 1.2700 are the key resistance areas.
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