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USD/CAD Trades Upward Channel - Labor Market Reports in Focus! 

EagleFX

The USD/CAD pair was closed at 1.31255 after placing a high of 1.31615 and a low of 1.30373. On Thursday, the USD/CAD pair rose and recovered the previous five days' losses on a strong U.S. dollar and soft crude oil prices. The WTI Crude oil prices dropped to $40.2 level on Thursday amid the rising coronavirus cases worldwide. The crude oil prices lost more than 3% and extended its slide towards $40 level that weighed on the commodity-linked Loonie. The weak Canadian dollar then ultimately added strength in the USD/CAD pair, and the pair started to post gains.

The worldwide coronavirus cases surged above 25.8M and raised concerns over the economic recovery. Meanwhile, the U.S. Dollar Index pushed higher on the day and remained in the positive territory near 92.8 level and supported the U.S. dollar that helped the USD/CAD pair to remain on the upside.

Meanwhile, the U.S. side's data came in favor of local currency as the U.S. Department of Labor reported on Thursday that almost 881K people applied for jobless claims benefit during the last week against the anticipated 955K and supported the U.S. dollar. The strong U.S. dollar gave a push to the already rising USD/CAD pair.

Furthermore, August's Final Services PMI data also supported greenback when reported as 55.0 against the forecasted 54.8 and the previous 54.8. The rise in Services PMI indicated growth in the U.S.'s services sector and gave the local currency strength that pushed the USD/CAD pair even higher to cover the previous five days' losses.

From the Canada side, the Trade Balance report for July was released at 17:30 GMT, which came in line with the forecast of -2.5B and had no impact on the currency. Market traders will retain a focus on the Non-Farm Employment Change and Unemployment Rate from the U.S. on the next day to find fresh clues about the currency pair movement. From the Canada side, the highly awaited Employment Change data will also be released that is expected as 262.5K; if the data released surpassed the expectations, then the Canadian dollar will surge and weigh on USD/CAD prices and vice versa.


Daily Technical Levels

Support resistance

1.3120 1.3081

1.2997 1.3119

1.2958 1.3149

Pivot point: 1.3058

The USD/CAD is trading with a bullish bias at 1.3095, having an immediate resistance at 1.3130. A bullish breakout of 1.3130 resistance can trigger buying until 1.3200 and 1.3245. On the other hand, pair may find support at 1.3060 and 1.2995 level. The MACD and RSI are supporting bullish bias in the USD/CAD. Let's brace for the U.S. NFP data and Canadian labor market figures during the U.S. session. Good luck!

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