USD/CAD: Traders Should Prepare For Movement


The Canadian dollar has inched higher in the Friday session. Currently, is trading at 1.3124, down 0.14% on the day. On the release front, the focus will be on employment indicators on both sides of the border. In Canada, was expected to post a small gain of 5,100 and is forecast to dip to 61.5 points. Over in the U.S., are expected to rise to 193,000, and Average Hourly Earnings is forecast to tick lower to 0.2%. Traders should be prepared for some movement from USD/CAD during the North American session.

There were no surprises on Wednesday as the Bank of Canada stayed on the sidelines and maintained the benchmark rate at 1.50%. The bank raised rates by a quarter-point in July and has hiked rates four times since last summer. The bank stated in its rate announcement that policymakers would be “monitoring closely the course of the NAFTA negotiations and other trade policy developments, and their impact on the inflation outlook.” With the Canadian economy performing well and the Fed likely raising rates later this month, there is pressure on the BoC to again raise rates in 2018. However, concerns over NAFTA and global trade tensions have won the day for now, as the BoC took a pass on a rate hike.

The global trade war has spooked investors and weighed on risk currencies such as the Canadian dollar. The U.S.-China trade spat has been in the headlines for months, with the U.S. slapping tariffs on China and the latter responding in kind. Will President Donald Trump ratchet up the trade war between the world’s two largest economies? Trump has threatened to impose tariffs on $200 billion worth of Chinese tariffs, and the time period for public consultations ended on Thursday, which means that Trump is free to announce another round of tariffs at any time. The U.S. dollar has benefited from the global trade war, and further tariffs against China could spell more headwinds for the wobbly Canadian dollar.

USD/CAD Fundamentals

Friday (September 7)

  • 8:30 Canadian Employment Change. Estimate 5.1K
  • 8:30 Canadian Unemployment Rate. Estimate 5.9%
  • 8:30 US Average Hourly Earnings. Estimate 0.2%
  • 8:30 US Nonfarm Employment Change. Estimate 191K
  • 8:30 US Unemployment Rate. Estimate 3.8%
  • 10:00 Canadian Ivey PMI. Estimate 61.5

*All release times are DST

*Key events are in bold

USD/CAD for Friday, September 7, 2018

USD/CAD for Sept. 6-7, 2018.

USD/CAD for Sept. 6-7, 2018.

USD/CAD, September 7 at 7:30 DST

Open: 1.3143 High: 1.3166 Low: 1.3114 Close: 1.3124

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2831 1.2970 1.3067 1.3160 1.3292 1.3386

In the Asian session, USD/CAD ticked higher but then reversed directions and posted losses. The pair has been flat in the European session

  • 1.3067 is providing support
  • 1.3160 was tested earlier in resistance
  • Current range: 1.3160 to 1.3292

Further levels in both directions:

  • Below: 1.3067, 1.2970 and 1.2831
  • Above: 1.3160, 1.3292, 1.3386, and 1.3547

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.



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