Usdcad declines as US economic data shows slowdown in manufacturing and employment sectors

USDCAD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.43%	-62.2 Pips
Week to-date	-0.49%	-70 Pips
April	-1.05%	-151.6 Pips

Upcoming key events (London Time)

Fri 01:30 PM CAD Labour Force Net Change in Employment
Fri 01:30 PM USD Nonfarm Payroll Employment
Fri 01:30 PM USD Average Hourly Earnings (12-mth)

What happened lately

The economic data from the United States shows a concerning slowdown in manufacturing and employment sectors. New orders for manufactured goods in the U.S. fell to 0.6% in February from a revised January figure of 1.7%. This decline indicates a cooling demand for manufactured products, potentially pointing to a broader economic slowdown. Furthermore, the Job Openings and Labor Turnover Survey (JOLTS) reported a decrease in job openings in February to 7.568 million, down from January’s revised figure of 7.74 million. A reduction in job openings suggests that businesses may be scaling back on expansion plans or feeling uncertain about the economic outlook, which could impact future job growth and consumer spending.

For Canada, there are no current specific figures to report; however, the focus is on the upcoming labor force net change in employment set to release. These data points are crucial as they will provide insights into Canada’s employment conditions amid global economic uncertainties.

The USDCAD currency pair, which measures the value of the U.S. dollar against the Canadian dollar, dropped by 0.43% to 1.42391. This decline may be influenced by the recent U.S. data indicating slower growth in manufacturing and tightening in the labor market. The relative economic performance will continue to impact the USDCAD movement, particularly with high-impact economic events scheduled for both countries. The upcoming U.S. nonfarm payroll employment data and average hourly earnings release, alongside Canada’s labor force change, could further sway the currency pair. Positive U.S. data could strengthen the USD, pushing USDCAD higher, whereas positive Canadian employment data could boost the CAD, leading to a potential decrease in the USDCAD rate. These data releases will be watched closely by traders and economists for cues on future monetary policy and economic health.

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What can we expect from USDCAD today?

USDCAD on Wednesday dropped -0.43% to 1.42391. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks bearish as the pair posted lower in Wednesday trading session.

Looking ahead for the day, immediate support level is at S1 1.41708 with break below could see further selling pressure towards S2 at 1.41024. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.43659 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.42000 would indicate selling pressure.

For the week to-date, take note that USDCAD is mixed as compared to the prior week.

Key levels to watch out:

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