2020-09-04 • Updated
The poor Canadian data in combination with the positive US report should push USD/CAD to the upside. Jump in for technical analysis!
All attention to USD/CAD as economic releases have just come out from both sides. The Canadian labor report revealed that 245 800 people found jobs in August, while analysts had predicted 262 500. At the same time, the Canadian unemployment rate was 10.2%, which was slightly worse than the forecast of 10.1%. The negative data may weigh on the loonie.
As for the US economic releases, non-farm payrolls came out almost as planned: 1.371 million Americans became employed during August, while analysts foresaw 1.375 million. The US unemployment rate came out much better than anticipated: 8.4% vs. the forecast of 9.8%. Besides, average hourly earnings beat estimates too. They turned out 0.4%, while the forecast was 0.0%. The optimistic data should add tailwinds to the US dollar.
USD/CAD has been trading in the descending channel since the end of June. However, now the pair may even break through the upper trend line amid such strong fundamentals. Actually, it has failed to cross it so far. There is the main question now: will be stronger fundamentals or technical factors? Let’s see what will happen. The move above the intersection of the yesterday’s high and upper trend line at 1.3130 may drive the pair upper to 1.3190. On the other hand, if the pair falls below the key psychological mark of 1.3000, it may dip down to the low of January 6 at 1.2950. Watch out closely the breakout of these levels and follow further news!
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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