USD/CAD rises toward mid-1.28s on robust ADP employment figures

• Private sector employment grows more than expected in September in the U.S.
• US Dollar Index stays in the positive territory above 95.50.
• WTI clings to gains above $75 ahead of EIA report.

After spending the majority of the day moving sideways in a tight range a little above the 1.28 mark, the USD/CAD pair gained traction as the greenback started to gather strength on the upbeat ADP employment report. As of writing, the pair was trading at 1.2840, adding 0.14% on the day.

The monthly report published by the ADP on Wednesday showed that the number of employed in the private sector rose 230,000 from August to September to beat the analysts’ estimate of 185,000 by a wide margin. Commenting on the data,  “The job market continues to power forward. Employment gains are broad-based across industries and company sizes. At the current pace of job creation, unemployment will fall into the low 3%’s by this time next year,” said    Mark Zandi, chief economist of Moody’s Analytics.

Boosted by the upbeat data, the US Dollar advanced to 95.60, where it was up 0.12% on the day. Later in the session, the IHS Markit and the ISM will be publishing their respective service sector PMI reports. Furthermore, speeches by FOMC members Brainard and Mester, as well as Chairman Powell, will be looked upon for fresh impetus.

In the meantime, the commodity-sensitive loonie is showing some resilience against the buck as the barrel of West Texas Intermediate continues to trade in the positive territory above $75 ahead of the weekly EIA stock report.  

Technical levels to consider

Resistances for the pair are located at 1.2850 (50-WMA), 1.2950 (200-DMA) and 1.3000 (psychological level). On the downside, supports align at  1.2780 (Oct. 1 low), 1.2730 (May 11 low) and 1.2690 (Apr. 9 low).