- Doubts surrounding the Fed rate cut weigh over the pair amid lack of major negatives from Canada.
- The US and Canadian employment data for June will offer fresh directives.
- WTI struggles to justify supply cuts amid uncertainty surrounding the future energy demand.
With the major market expectations continue to support increased pace of the US Federal Reserve rate cuts, a contrast to the recent downtick of Canada’s key export item crude, the USD/CAD pair clings to more than eight-month low while trading near 1.3050 amid initial Asian trading session on Friday.
Recently downbeat data from the US and dovish rhetoric from the Federal Reserve policymakers push global investors toward expecting more than one rate cuts from the US central bank. The same has recently been weighing over the US Dollar (USD) despite the US-China trade truce.
On the other hand, Canadian fundamentals like purchasing manager index (PMI) data and trade balance statistics haven’t been disappointing, together with the absence of dovish warnings from the Bank of Canada (BOC) official.
However, prices of the crude refrain to respect the extension of global supply cut accord amid looming uncertainty over future demand while the world’s two largest economies are at loggerheads with each other.
Moving on, June month employment data from the US and Canada will be in the spotlight with the US Nonfarm Payrolls (NFP) likely grabbing major attention.
The headline US employment indicator is expected to deliver 160K figure against 75K prior with an improvement in the Average Hourly Earnings (YoY) to 3.2% from 3.1% and no change in 3.6% Unemployment Rate.
Meanwhile, the Canadian Unemployment rate could inch a bit up to 5.5% from 5.4% with an expected decline in Net Change in Employment by 10.0K figure versus 27.7K prior.
Other than US-Canada jobs report, political/trade news will also offer intermediate moves to the global markets.
Technical Analysis
With the 14-day relative strength index (RSI) flashing oversold signals, prices may revisit latest high around 1.3147 if managed to clear 1.3110 immediate resistance. However, 1.3155/60 and early-June month low near 1.3242 can limit the pair’s further advances.
Alternatively, 1.3000 and late-October bottom surrounding 1.2970 can please sellers during additional declines.
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