USD/CAD – Canadian dollar trading sideways, U.S services report next

The Canadian dollar has edged lower in the Monday session. Currently, USD/CAD is trading at 1.3098, down 0.08% on the day. On the release front, there are no Canadian indicators. In the U.S, ISM Non-Manufacturing PMI is expected to drop to 59.3 points. On Tuesday, the U.S will release JOLTS Job Openings and all eyes will be on the U.S midterm congressional elections. Canada will release Building Permits.

Canadian employment data was solid in October. The economy added 11.2 thousand jobs in October, but this was shy of the estimate 12.7 thousand. The unemployment rate ticked lower to 5.8%, a shade better than the forecast of 5.9%. These numbers will likely increase the likelihood of a rate hike from the Bank of Canada in early December. The economy is doing well and the BoC is also mindful that the Federal Reserve is expected to raise rates again in December, which would mark a fourth rate hike in 2018. Policymakers do not want to see divergence widen between U.S and Canadian rates, and another rate hike from the BoC would be bullish for the Canadian dollar.

The U.S economy continues to perform well, a fact that will be hammered home by President Trump and the Republicans in the few hours left until Election Day on Tuesday. The labor market is at or beyond capacity, and nonfarm payrolls surged to 250 thousand, crushing the estimate of 194 thousand. Wage growth has also strengthened, with strong gains of 3.1% in the past year. Despite these strong numbers, the dollar failed to make headway on Friday, as reports that President Trump will present his Chinese counterpart with a trade deal proposal increased risk appetite and weighed on the greenback.

Decision Time

Markets in wait and see mode ahead of midterms

USD/CAD Fundamentals

Monday (November 5)

  • 9:10 BoC Governor Stephen Poloz Speaks
  • 10:45 US Final Services PMI. Estimate 54.7
  • 11:00 US ISM Non-Manufacturing PMI. Estimate 59.3
  • Tentative – US Loan Officer Survey

Tuesday (November 6)

  • 9:30 Canadian Building Permits. Estimate 0.3%
  • 10:00 US JOLTS Job Openings
  • All Day  – US Congressional Elections

*All release times are EST

*Key events are in bold

USD/CAD for Monday, November 5, 2018

USD/CAD, November 5 at 8:20 DST

Open: 1.3109 High: 1.3113 Low: 1.3091 Close: 1.3098

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2733 12831 1.2970 1.3099 1.3198 1.3292

USD/CAD showed little movement in the Asian session. This pair has ticked lower in European trade

  • 1.2970 is providing support
  • 1.3099 is fluid. Currently, it is a weak resistance line.
  • Current range: 1.2970 to 1.3099

Further levels in both directions:

  • Below: 1.2970, 1.2831 and 1.2733
  • Above: 1.3099, 1.3198, 1.3292 and 1.3383

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.