USD/CAD Forecast – US Dollar In Trouble Vs Canadian Dollar
- – The US Dollar declined this week vs the Canadian dollar and moved below 1.3100 support.
- – There is a contracting triangle pattern formed on the 4-hours chart of USD/CAD with support at 1.2960.
- – Today’s US nonfarm payrolls release by the US Department of Labor might impact the USD/CAD pair since it is approaching a break with resistance at 1.3050.
US Non-farm Productivity and NFP
Recently, the Non-farm Productivity, which shows the output per Hour of labor worked was released by the Bureau of Labor Statistics of the US Department of Labor. The market was expecting an increase of 1% (preliminary) in the Non-farm Productivity in Q4 2016, compared with the previous quarter.
However, the result was better, as there was a rise of 1.3% in Q4 2016. The last reading was also revised up from 3.1% to 3.5%. Moreover, the report added that “Nonfarm business sector labor productivity increased at a 1.3-percent annual rate during the fourth quarter of 2016”. So, overall, the result was positive. Today, there is a major release, as the US nonfarm payrolls report will be published by the US Department of Labor.
The market is looking for a stable reading of 175K, up from the last 156K. A positive outcome may help USD/CAD in breaking the 1.3050 resistance, else there can be a downside break as well.
USD/CAD Technical Analysis
The US Dollar faced a lot of selling pressure against the Canadian dollar this week, and traded towards 1.2960. The USD/CAD somehow recovered from 1.2968, but currently finding sellers near 1.3030.
The pair is facing resistance mainly near a contracting triangle pattern formed on the 4-hours chart with hurdle at 1.3030-1.3050. Since the pair broke the last swing low of 1.3018, there are chances of the pair heading towards the 1.236 extension of the last wave from the 1.3018 low to 1.3387 high.
So, there is a possibility of the pair finding sellers and moving down towards 1.2950-1.2930. Only a break and close above the 1.3050 resistance may open the doors for more gains. The next resistance in that case would be near 1.3100, coinciding with the 100 simple moving average (H4).
