Non-Farm Payrolls Data is Coming, Can the Bulls Take Off?

Summary:

During the day, the market's attention is firmly fixed on the upcoming U.S. non-farm payroll data. The trend of the USDCAD favors the bulls.

BUY USDCAD

Close Time

CLOSED

1.37929

Entry Price

1.41200

1.37200

1.39780 +0.00124 +0.09%

24.1

Pips

Profit

1.37200

1.38170

Exit Price

1.37929

Entry Price

1.41200

Fundamentals

In Canada, the latest released Consumer Price Index (CPI) for July dropped to approximately 1.7% YoY, and the core inflation also showed a downward trend. This has significantly reduced the market's expectation of the Bank of Canada(BoC) maintaining a hawkish stance. As a result, it exerts pressure on the Canadian dollar in the medium term and tends to push up the USDCAD exchange rate.

In the United States, the market is closely watching the non-farm payroll data to be released today. The generally-referenced market expectation for non-farm payrolls is around 70,000 to 75,000, and the unemployment rate may slightly rise to about 4.3%. Notably, a series of recent employment-related data in the U.S. have signaled a slowdown in the labor market: the number of initial jobless claims has risen to approximately 237,000, and the employment growth rate in the private sector as measured by the ADP has declined from 106,000 in July to about 54,000. These data all point to a weakening recruitment momentum, leading the market to place a greater "bet" on "whether the Fed will turn dovish more quickly" ahead of the release of the non-farm payroll data.

Technical Analysis

On the daily chart, after a significant correction in the earlier period, the USDCAD formed a bottom consolidation range between 1.3560 and 1.3750. Recently, it broke through the upper boundary of this range, further expanding the upside potential. Meanwhile, the price retraced downward to 1.3750 twice, but failed to break below this level on both occasions. The candlestick chart shows a pattern of a breakout from the consolidation range followed by a retest for confirmation, which further strengthens the short-term bullish momentum.

Currently, the USDCAD is expected to face resistance at the previous high of 1.3924 in the short term. If it can effectively break through this level, the upside potential for the subsequent market will be unlocked. The first target is expected to reach 1.4160.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3780

Target Price: 1.4120

Stop Loss: 1.3720

Valid Until: September 19, 2025, 23:00:00

Support: 1.3770/1.3725

Resistance: 1.3924/1.4160

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