The Canadian dollar missed the risk-taking parade earlier today!
Luckily, both the U.S. and Canada have data releases scheduled in the next trading session. Think we’ll see a decent pullback for the comdoll?
Before moving on, ICYMI, yesterday’s watchlist looked at EUR/USD’s retracement levels ahead of the U.S. ADP and ISM services PMI releases. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
ADP U.S. Private Payrolls for September: 89K (160K forecast; 180K previous)
S&P Global US Services PMI in September: 50.1 vs. 50.5 in August
ISM Services PMI for September: 53.6 vs. 54.5 previous; Employment Index: 53.4 vs. 54.7 previous; Prices Index stayed at 58.9
U.S. Factory Orders for August: 1.2% m/m (0.3% m/m forecast; -2.1% m/m previous)
ANZ world commodity price index rose by 1.3% m/m in September after trending lower for the last three months
Australia’s trade surplus widened from 7.32B AUD to 9.64B AUD as exports (+4.0% m/m) outpaced imports (-0.4% m/m) in August
Germany’s trade surplus widened from 16.0B EUR to 16.6B EUR in August but both the exports (-1.2%) and imports (-0.4%) weakened compared to July
U.K.’s construction PMI dropped from 50.8 to 45.0 in September and marked its steepest decline May 2020
France’s industrial production decreased by 0.3% (vs. -0.4% expected, 0.5% previous)
Price Action News
Risk-taking was the name of the game during the Asian and early London sessions as traders caught up to the pullbacks in U.S. bond yields and U.S. dollar strength.
The Canadian dollar missed the risk-taking train, however, thanks to the sharp drop in crude oil prices limiting the oil-related currency.
CAD dipped at the start of the Asian session and then saw a fresh wave of selling near the London session open.
So far, CAD has registered its biggest losses against AUD, NZD, and JPY and is seeing the least intraday losses against GBP, CHF, and USD.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. Challenger job cuts at 11:30 am GMT
U.S. trade balance at 12:30 pm GMT
Canada’s IVEY PMI at 2:00 pm GMT
Japan’s average cash earnings at 11:30 pm GMT
Japan’s household spending at 11:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
USD/CAD: 15-min
Unlike the other “risk” assets, the Canadian dollar straight up extended its losses against the U.S. dollar today.
USD/CAD found support near 1.3725 and has made new weekly highs closer to the R1 (1.3790) Pivot Point level.
If you’re looking to jump in USD/CAD’s uptrend, then you might want to set your sights on the 1.3750 area of interest that’s just above the Pivot Point (1.3740) line. As you can see, USD/CAD bulls and bears think that the area is a big deal, at least in the short term.
Today’s U.S. initial jobless claims and trade balance and Canada’s IVEY PMI report may provide the volatility the pair needs to either pull back or make even higher highs.
Data from the U.S. are expected to print slightly higher numbers while Canada’s IVEY PMI could print much lower figures.
If the fundamentals check out and we see a return to the pro-USD, anti-risk market themes, then USD/CAD may pump higher without a significant short-term pullback. It may head to the R2 (1.3830) levels even if it has already gained a lot of pips today!
But if U.S. session traders extend the pro-risk, anti-USD theme from yesterday, then USD/CAD could revisit the Pivot Point area or even the 100 and 200 SMA levels before the bulls step in again.
What do you think? Will USD/CAD see a legit retracement? Or will it make new highs without looking back?
