USDCAD Fundamental Analysis – July 5th 2019

Fresh from the July 4th Independence Day Holiday and with many forex traders taking a long weekend, the key NFP report for June will be released. Following last month’s disappointing reading, expectations for a rebound are high. Sentiment was dampened after Wednesday’s ADP report disappointed. Will June’s report showed a headline figure below 100K as it did in May? How will the USDCAD react if today’s employment data disappoints? Expectations for the US Fed to cut interest rates in July are high and a weak NFP report may cause the central bank to act. Today’s fundamental analysis will take a look at the downside in this currency pair as well as the upside potential.

Here is the key factor to keep in mind today for US Dollar trades:

• US NFP Report: The US NFP Report for June is predicted to show 160K job additions and an unemployment rate of 3.6%. Forex traders can compare this to the US NFP Report for May which showed 75K job additions and an unemployment rate of 3.6%. Private Payrolls for June are predicted to show 155K job additions and Manufacturing Payrolls 1K job additions. Forex traders can compare this to Private Payrolls for May which showed 90K job additions and Manufacturing Payrolls which showed 3K job additions. The Average Work Week for June is predicted at 34.4 hours. Forex traders can compare this to the Average Work Week for May which was reported at 34.4 hours. Average Hourly Earnings for June are predicted to increase by 0.3% monthly and by 3.2% annualized. Forex traders can compare this to Average Hourly Earnings for May which increased by 0.2% monthly and by 3.1% annualized. The Labor Force Participation Rate for June is predicted at 62.8%. Forex traders can compare this to the Labor Force Participation Rate for May which was reported at 62.8%.

The Canadian Dollar has benefited from higher commodity prices, namely oil and gold, as trade tensions pushed gold higher while geopolitical issues drove the price of oil higher. As the global economy is showing signs of further cooling and central banks leaning towards more monetary easing, will this trend continue? Forex traders will get the Canadian employment report for June, can it extend the strong rally in the Canadian Dollar against the US Dollar which pushed the USDCAD below support levels? Follow the PaxForex Daily Fundamental Analysis and take the profitable side of this trade with the help of our expert analysts.

Here are the key factors to keep in mind today for Canadian Dollar trades:

• Canadian Employment Report: The Canadian Employment Report for June is predicted to show the addition of 10K jobs and an Unemployment Rate of 5.5%. Forex traders can compare this to the Canadian Employment Report for May which showed the addition of 27.7K jobs and an Unemployment Rate of 5.4%. Hourly Earnings for Permanent Employees for June are predicted to increase by 2.4% annualized. Forex traders can compare this to Hourly Earnings for Permanent Employees for May which increased by 2.6% annualized. The Participation Rate for June is predicted at 65.7%. Forex traders can compare this to the Participation Rate for May which was reported at 65.7%.
• Canadian Ivey PMI: The Canadian Ivey PMI for June is predicted at 55.0. Forex traders can compare this to the Canadian Ivey PMI for May which was reported at 55.9.

Should price action for the USDCAD remain inside the or breakdown below the 1.3035 to 1.3140 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 1.3060
• Take Profit Zone: 1.2680– 1.2780
• Stop Loss Level: 1.3150

Should price action for the USDCAD breakout above 1.3140 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 1.3190
• Take Profit Zone: 1.3285 – 1.3320
• Stop Loss Level: 1.3140

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