- US manufacturing activity fell in March to the lowest point in nearly three years.
- The number of vacancies in the US fell to the lowest level in nearly two years.
- The value of Canadian building permits rose by 8.6% in February.
Today’s USD/CAD forecast is bullish. USD/CAD rose Wednesday as the Canadian dollar fell with the rise in oil prices. Oil prices fell as poor data from the US fueled recession and demand worries.
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As new orders plunged, US manufacturing activity fell in March to the lowest point in nearly three years.
According to statistics published overnight, the number of job openings in the US fell to the lowest level in close to two years in February, suggesting that the labor market was finally easing.
On the last day of February, the JOLTS report revealed a decrease of 632,000 to 9.9 million in job openings, a measure of labor demand. Economists had expected 10.4 million job openings.
The markets adjusted their forecast for rate increases due to the weaker-than-expected US jobs statistics. According to the CME FedWatch tool, markets are currently pricing in a 59% probability of the Fed keeping interest rates unchanged at its next policy meeting in May. Markets were factoring in a 43% possibility that the Fed wouldn’t increase interest rates a day earlier.
The value of Canadian building permits rose by 8.6% in February after a revised 3.7% decline in January.
The February trade balance will provide further hints on the condition of the domestic economy for Canada, which is scheduled to be reported on Wednesday, and the March employment report, scheduled for release on Thursday.
USD/CAD key events today
Investors anticipate US statistics on PMI and employment. Activity in the non-manufacturing industry will be reflected in the ISM non-manufacturing PMI, while the ADP nonfarm employment change will reveal the condition of employment in the private sector.
USD/CAD technical forecast: Pullback aiming at 1.3500
The 4-hour chart shows USD/CAD in a downtrend, with the price below the 30-SMA and the RSI below 50. Bears managed to break below the 1.3500 key psychological level and to trade below it. However, bulls returned when the price got oversold and are now retracing the recent move.
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The pullback will likely retest the recently broken 1.3500 level and the 30-SMA. From here, the price will break above or bounce lower and continue the downtrend to 1.3400.
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