USDCAD Analysis
| Week Ending 2024-10-04 | |||
| Open | High | Low | Close |
| 1.35 | 1.36 | 1.35 | 1.36 |
| Performance | ||||||
| Period | Pct | Chg | Momentum | |||
| Friday | 0.18% | 24.3 Pips |  |
|||
| Week 2024-10-04 | 0.46% | 62.2 Pips |  October |
0.32% | 43.8 Pips | |
Upcoming key events for the new week (London Time)
Wed 07:00 PM FOMC Meeting Minutes 
Thu 01:30 PM Initial Unemployment Insurance Claims Thu 01:30 PM CPI Inflation Rate (12-mth)
Fri 01:30 PM Labour Force Net Change in Employment Fri 01:30 PM Producer Price Index (12-mth)
What happened over the week
In the United States, significant improvements were noted in employment statistics for September, according to the Bureau of Labor Statistics. The unemployment rate declined slightly to 4.1%, down from 4.2% in August. Additionally, the U-6 total, a broader measure of labor underutilization, also fell to 7.7% from 7.9% in the previous month. Nonfarm Payroll Employment exhibited a notable increase, rising to 254,000 from a revised figure of 159,000, indicating strong job growth. The average hourly earnings on a monthly basis showed a minor decline, dropping to 0.4% from 0.5%, although the 12-month metric demonstrated an increase to 4% from 3.9%. Conversely, new orders for manufactured goods dipped by 0.2% in August, contrasting with a significant 4.9% increase in July. The Department of Labor reported an uptick in initial unemployment claims, with figures reaching 225,000 from a revised 219,000. Additionally, JOLTS data revealed an increase in job openings, rising to 8.04 million from 7.711 million in July.
The economic data coming out of the United States indicates a labor market that is improving, predominantly captured by the decrease in the unemployment rate and rise in nonfarm payroll numbers. However, the slight drop in average hourly earnings and new orders signals potential marginal slowdowns in wage growth and manufacturing demand. The rise in initial unemployment claims is another mixed signal that may imply fluctuations in labor market dynamics. These mixed developments can create volatility in the USDCAD currency pair. A strong labor market often supports the U.S. dollar, potentially leading to its appreciation against the Canadian dollar. However, weaknesses in manufacturing and wage growth could dampen the overall bullish momentum.
As USDCAD already rose by 0.18% on Friday and saw a weekly gain of 0.46%, the forex market may react to the mixed U.S. data with volatility. Upcoming high-impact events such as the FOMC Meeting Minutes and various reports, including the CPI Inflation Rate and Producer Price Index, could significantly influence future currency movements. Similarly, Canadian labor data will also play a vital role in determining the USDCAD pair’s direction. Therefore, traders will be focusing on these reports for a clearer view of the economic trajectory and potential policy changes from both the U.S. Federal Reserve and Bank of Canada, which may affect their trading decisions on USDCAD.
From X (Twitter)
The Canada Ivey Purchasing Managers Index, seasonally adjusted, increased to 53.1 in September from 48.2 in August. https://t.co/ShTRXQCdRg
— Market Recap (@forexforum) October 6, 2024
What can we expect from USDCAD for the new week and what happened on Friday?
USDCAD on Friday rose 0.18% to 1.36. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-10-04, the pair rose 0.46% or 62.2 pips higher.
Looking ahead, USDCAD looks bullish as the pair ended higher after Friday trading session.
For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.36 (WR1) with break above could target 1.37 (WR2). On the downside, we are looking at week low of 1.35 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.36 would suggest bullish bias after recent positive movement.
For the month of October, USDCAD is up by 0.32% or 43.8 pips higher.
Weekly key levels to watch out:
| R3 | 1.37 |
| R2 | 1.37 |
| R1 | 1.36 |
| Weekly Pivot | 1.35 |
| S1 | 1.35 |
| S2 | 1.34 |
| S3 | 1.34 |
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