The week started slowly for USD/CAD, as Canadian banks were closed for a holiday. Tuesday has started in the same fashion, with limited movement from USD/CAD.
Canada Manufacturing PMI shows expansion
Canada’s manufacturing sector has been hit hard by the Covid-19 pandemic, as the lockdown has resulted in decreased factory production. Manufacturing PMI hasn’t recorded a reading in expansion territory since April, but the rate contraction has slowed. The June release improved to 47.8, up from 40.6. The upswing continued in July, as the PMI rose to 52.9. The 50-mark separates contraction from expansion.
US dollar improves on ISM Manufacturing PMI
The US dollar received a much-needed boost against the majors after a strong showing from ISM Manufacturing PMI on Monday. The PMI accelerated for a third successive month, rising from 52.6 to 54.2. This marked the PMI’s strongest read since March 2019. As well, the Markit Manufacturing PMI climbed to 50.9 in July, its first read in expansion territory since February.
USD/CAD is currently trading at 1.3416, up 0.17% on the day. The pair lost ground in the Asian session but reversed directions and posted considerable gains in European trade
- 1.3447 is under pressure resistance. Above, we find resistance at 1.3478
- 1.3379 is providing support, followed by support at 1.3342
- USD/CAD is trading just below the 10-day MA. If the pair breaks above this line, it is a bullish sign for the pair
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