The USD/CAD succeeded to extend its early day bullish bias and hit the intra-day high well above 1.3100 level mainly due to the broad-based US dollar strength backed by the Friday released upbeat US jobless rate and wage growth data. The US dollar gains were also supported by the high safe-haven demand in the market. Across the pond, the reason for the currency pair bullish bias could also be attributed to the weaker oil prices which ultimately undermined the demand for the commodity-linked currency the loonie, and contributed to the currency pair gains.
The market trading sentiment reporting losses on the day as the US-China tussle picked up the pace. As well as, the gloomy headlines concerning the Brexit also weighed on the market trading sentiment, which eventually increased the safe-haven demand in the market. This, in turn, underpinned the US currency.
Also supporting the US dollar was the upbeat US labor market report. At the data front, the headline Non-farm payrolls data for August missed expectations with +1371K. However, the unemployment rate dropped to 8.4%.vs 9.8% expected. In the meantime, the Average Hourly Earnings exceeded predictions, with +0.4% MoM in August vs. 0% expected.
The USD front, the broad-based US dollar managed to maintain its bullish trend and remains on the bullish track on the day. However, the US dollar gains were also supported by the upbeat US labor market report, that reported a drop in the U.S. unemployment rate, and a surge in U.S. Treasury yields. Thus, the gains in the US dollar kept the currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.18% to 92.882 by 12:05 AM ET (5:05 AM GMT).
Across the Ocean, the crude oil prices remain on the bearish track as Saudi Arabia started the massive monthly price cuts for supply to Asia in 5-months. Also weighing on the oil prices were the fears of oversupply amid the coronavirus pandemic. Thus, the declines in oil prices undermined demand for the commodity-linked currency the loonie and contributed to the currency pair gains.
The U.S. market could be inactive today in the wake of the U.S. labor day holiday. However, the updates on the virus and Sino-American tension will be key to watch. In the meantime, the market players will be interested in the headlines concerning the Brexit.
The USD/CAD is trading at 1.3094 level, holding right below a strong resistance level of 1.3112 level. Closing of a doji candle below 1.3112 level may trigger selling until 1.3042 level. Checkout forex trading signal below.
Entry Price – Sell 1.3099
Stop Loss – 1.3139
Take Profit – 1.3059
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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