Triple Whammy for USDCAD Tomorrow
Three big events, three big chances for volatility in USD/CAD tomorrow.
Share this:
Thursday could be an extremely volatile day for the USD/CAD. Tomorrow, Canada releases the Employment Change for March, which is expected to be -350,000 vs +30,300 in February. As with the US Nonfarm payrolls last week, Canada is expecting a large drop in employment due to the coronavirus. Recall in the US last week, that while -100,000 jobs were expected, the actual number was -701,000. We could see a similar miss in Canada’s data. However, as with the US, the worst of it will most likely be seen in April’s data as opposed to March’s data.
In addition, the same time Canada’s employment data is due, the US will be releasing Initial Claims for the week ending April 4th. The expectation is only for 5,250,000 new jobless claims vs 6,648,000 the prior week. That followed the 3,283,000 from the week ending March 21st. Hopefully the number will be near the estimate, or at the very least, under last weeks! These 2 events could add significant volatility to the USD/CAD.
If that weren’t enough, OPEC+ is planning a virtual meeting tomorrow to discuss oil production cuts. Given that Canada is an oil exporting led economy, decisions made will likely affect the value of the Canadian Dollar. Earlier today, the Algerian minister suggested that there will be a massive reduction in production, which could reach 10 million barrels per day. As a result, WTI Crude is up 7.5% today while USD/CAD sold off 50 pips after the announcement.
USD/CAD is currently in a large symmetrical triangle dating back to March 12th. Price has recently pulled back to the 38.2% Fibonacci retracement level from the low on December 31st, 2019 to the highs on March 19th, near 1.4010. The pair is consolidating at that level which is also near the apex of the symmetrical triangle.
Source: Tradingview, City Index
On a 240-minute timeframe, USD/CAD is holding just under horizontal resistance near 1.4075. Trendline resistance on the daily is above there near 1.4200, and horizontal resistance once again near 1.4375. Support is at the 50% retracement level of the previously mentioned timeframe near 1.3809, the 61.8% Fibonacci retracement at 1.3604, and finally the gap-fill from the weekend reopen on March 9th near 1.3436.
Source: Tradingview, City Index
Three big events, three big chances for volatility in USD/CAD tomorrow. However, be on the lookout for comments overnight ahead of the OPEC meeting, which could set off some fireworks!
Thursday could be an extremely volatile day for the USD/CAD. Tomorrow, Canada releases the Employment Change for March, which is expected to be -350,000 vs +30,300 in February. As with the US Nonfarm payrolls last week, Canada is expecting a large drop in employment due to the coronavirus. Recall in the US last week, that while -100,000 jobs were expected, the actual number was -701,000. We could see a similar miss in Canada’s data. However, as with the US, the worst of it will most likely be seen in April’s data as opposed to March’s data.
In addition, the same time Canada’s employment data is due, the US will be releasing Initial Claims for the week ending April 4th. The expectation is only for 5,250,000 new jobless claims vs 6,648,000 the prior week. That followed the 3,283,000 from the week ending March 21st. Hopefully the number will be near the estimate, or at the very least, under last weeks! These 2 events could add significant volatility to the USD/CAD.
If that weren’t enough, OPEC+ is planning a virtual meeting tomorrow to discuss oil production cuts. Given that Canada is an oil exporting led economy, decisions made will likely affect the value of the Canadian Dollar. Earlier today, the Algerian minister suggested that there will be a massive reduction in production, which could reach 10 million barrels per day. As a result, WTI Crude is up 7.5% today while USD/CAD sold off 50 pips after the announcement.
USD/CAD is currently in a large symmetrical triangle dating back to March 12th. Price has recently pulled back to the 38.2% Fibonacci retracement level from the low on December 31st, 2019 to the highs on March 19th, near 1.4010. The pair is consolidating at that level which is also near the apex of the symmetrical triangle.
Source: Tradingview, FOREX.com
On a 240-minute timeframe, USD/CAD is holding just under horizontal resistance near 1.4075. Trendline resistance on the daily is above there near 1.4200, and horizontal resistance once again near 1.4375. Support is at the 50% retracement level of the previously mentioned timeframe near 1.3809, the 61.8% Fibonacci retracement at 1.3604, and finally the gap-fill from the weekend reopen on March 9th near 1.3436.
Source: Tradingview, FOREX.com
Three big events, three big chances for volatility in USD/CAD tomorrow. However, be on the lookout for comments overnight ahead of the OPEC meeting, which could set off some fireworks!
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/CAD Analysis: A Stronger U.S. Dollar Keeps Pressure on the CAD
Recent trading sessions have not been particularly favorable for the Canadian dollar. USD/CAD has now recorded four consecutive bullish sessions, accumulating gains of more than 1.00% in favor of the U.S. dollar. This move once again highlights a relevant bullish bias within the market and shows that buying pressure continues to dominate in the short term.
USD/CAD Forecast: Trade Risks Continue to Weigh on the Loonie
Over recent trading sessions, a growing sense of indecision has once again become evident around USD/CAD price action. For now, average movements over the last four trading sessions have failed to establish a clear directional bias, with daily fluctuations remaining close to 0.2%, a relatively modest figure compared to the moves above 0.6% observed last week
USDCAD Analysis Can the Canadian Dollar Maintain Its Momentum
The trading week continues to be particularly relevant for the strength currently being displayed by the Canadian dollar. Over the last two trading sessions, USD/CAD has declined by approximately 0.7%, once again highlighting a bearish bias in favor of the Canadian currency.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.