Canadian Dollar Weakens Despite US NFP Missed

Fundamental Analysis

* Loonie Downturn: On Friday, the Canadian Dollar (CAD) experienced a widespread decline despite disappointing US Nonfarm Payrolls (NFP) and wage data, causing it to plummet after an initial uptick. Given the absence of significant economic data in Canada until Tuesday, the Canadian Dollar was vulnerable to broader market dynamics. Poor US data failing to boost the Loonie as the overall weak risk sentiment kept demand for the Canadian Dollar subdued. Additionally, the Canadian Dollar was further weighed down by a drop in crude oil prices on Friday.

Technical Analysis

* Technical Breakout: USDCAD was traded higher following prior breakout above the previous resistance level 1.36650. MACD which illustrate diminishing bearish momentum signal suggest the pair to further extend its upward momentum.

* Resistance and Targets: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.37250. Conversely, if the price breach back above the level 1.36650, a potential is expected and the price could head back towards the level 1.36150.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving ahead, traders will remain attentive to economic indicators from both the U.S. and Canada to assess the trajectory of the currency. Simultaneously, the market will closely monitor oil prices, which could further impact the Canadian dollar, considering Canada’s substantial position as a leading global oil producer.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and Canada data, BoC related updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.