The USD/CAD price pulled back this week as the US dollar strength waned. It dropped to a low of 1.3571, which was about 1.90% lower than the highest point last week. Focus now shifts to the upcoming American and Canadian jobs data.
US and Canada jobs data
The USD to CAD exchange rate continued to drop as the market focused on the latest meeting by OPEC+. In it, the members announced that they will slash production by 2 million barrels per day in a bid to leave oil prices higher. This is important since Canada is one of the biggest oil exporters in the world. Oil prices have bounced back, with Brent soaring o $93 and West Texas Intermediate (WTI) rising to $88.
The USD/CAD price also declined because of the relatively weaker US dollar. US Dollar index crashed from last week’s high of $115 to a low of $110 as investors predicted a potential Fed pivot. Analysts expect that the bank will start reducing the size of its interest rate hikes soon. Still, it is unclear whether the bank will do that.
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The next catalyst for the USDCAD price will be a statement by Bank of Canada’s Tiff Macklem. In it, he will likely provide more details about what the bank will do when it meets on October 26. Meanwhile, the US and Canada will publish the latest jobs numbers on Friday.
Analysts expect these numbers to show that US non-farm payrolls rose by 250k in September, lower from the previous month’s 308k. If they are accurate, these numbers will mean that the labor market is doing substantially well. They also believe that the unemployment rate remained at 3.7% in September while the average hourly earnings rose by 5.1%.
USD/CAD forecast
The four-hour chart shows that the USD to CAD exchange rate has been under pressure in the past few days. This is after it formed a double-top pattern at 1.3835 last week. It managed to move below and then retested the neckline of this pattern at 1.3598. The pair has also declined below the 25-day and 50-day moving averages.
Therefore, the pair will likely continue falling as sellers target the important support level at 1.3400. A move above the resistance at 1.3680 will invalidate the bearish view.
