USD/CAD Forecast Sep. 7-11 – Canada, US post solid job numbers

The Canadian dollar posted slight gains last week, as USD/CAD broke below the 1.30 mark for the first time since January. There are three releases in the upcoming week, including the Bank of Canada rate decision. Here is an outlook at the highlights and an updated technical analysis for USD/CAD.

In Canada, it was another positive month for manufacturing, as Manufacturing PMI rose to 55.1, up from 52.9 beforehand. A reading above the 50-level indicates expansion. Canada’s trade deficit narrowed to C$2.5 billion, down from C$3.2 billion. On the employment front, Canada created 245.8 thousand jobs, down from 418.5 thousand a month earlier. As well, the unemployment rate fell from 10.9% to 10.2%, marking a 5-month low.

In the US, Manufacturing PMI improved to 56.0, up from 54.2. The Services PMI also pointed to expansion, but slowed to 56.9, down from 58.1 beforehand. Unemployment claims dropped below the 1-million mark with a reading of 886 thousand. Nonfarm payrolls slowed to 1.371 million, but was very close to the estimate of 1.374 million. The unemployment rate fell sharply to 8.4%, down from 10.2%. This marked the first single-digit reading since April, prior to the Corvid-19 pandemic. There was more good news from wage growth, which rose from 02% to 0.4%.

USD/CAD daily chart with support and resistance lines on it. Click to enlarge: