- The US economy added only 12,000 jobs in October.
- The Canadian economy was unchanged in August.
- US core PCE rose 0.3%, leaving Fed rate cut bets unchanged.
USD/CAD price analysis shows fresh bearish sentiment as dollar falls after dismal employment report. Meanwhile, the Canadian dollar ends October with its biggest monthly loss in two years. Meanwhile, market participants remained cautious ahead of the US presidential election.
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Data on Friday revealed that the US economy added just 12,000 jobs in October, a huge drop from the previous month. At the same time, this was well below the estimate of 106,000 jobs. Meanwhile, the unemployment rate is stable at 4.1%.
This week, the US dollar paused its gains as data showed a mixed picture of the economy. As expected, core PCE rose 0.3%, leaving bets on a Fed rate cut unchanged. Meanwhile, jobless claims fell more than expected, pointing to tough labor market conditions. However, the employment cost index declined.
Meanwhile, the Canadian dollar rallied but remained near a 12-week low on Friday after weak domestic data and a drop in risk appetite. Data on Thursday revealed that the Canadian economy was unchanged in August. The pause followed a 0.1% expansion in the previous month.
Markets are betting on more interest rate cuts from the Bank of Canada after it made a huge move at its last meeting. BoC Governor Tiff Macklem noted that the central bank will continue to lower borrowing costs if the economy performs as expected. At the same time, the madman fell because of a bad appetite for risk. Market participants have gradually become risk averse due to uncertainty surrounding the upcoming US presidential election.
USD/CAD Key Events Today
USD/CAD Technical Price Analysis: Bears struggle for control at 30-SMA
From the technical side, USD/CAD price is testing the 30-SMA line, a sign that the bears are triggering an uptrend. The price remained in a bullish path, trading above the 30-SMA, with the RSI above 50.
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However, the RSI is showing fading momentum as it has made a bearish divergence. If the bears strengthen further, the price will break below the SMA to retest the 1.3825 support level. Such an outcome would indicate a change in mood and possibly a reversal. On the other hand, if the SMA holds tight, the bulls could reach resistance at 1.3950.
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