Forex traders will eagerly await the release of the August NFP report out of the US. Economists anticipate solid employment gains in the private sector with a minor slowdown in earnings on an annualized basis. Will today’s NFP report rally UD Dollar bulls after the sell-off we witnessed in September so far? The US Fed is expected to cut interest rates again this month and officials are watching the strength of the labor market as the global economy is slowing down as well as inflationary pressures from the wage sector. How will the USDCAD trade after the release of the August NFP report? Subscribe to the PaxForex Daily Fundamental Analysis where you can grow your balance trade-by-trade!
Simultaneously with the NFP report out of the US, Canada will release its employment report for August. Expectations call for a reversal of July’s job losses which came in bigger than anticipated. Hourly earnings for permanent employees have been strong at 4.5% annualized and are favored to clock in at the same gain in August. This is adding inflationary pressures and may prevent the Bank of Canada from easing interest rates, further providing a boost to the USDCAD. Will today’s Canadian employment report deliver and rally the Canadian Dollar against the US Dollar? Today’s fundamental analysis will explore price action in both directions.
Here is the key factor to keep in mind today for US Dollar trades:
- US NFP Report: The US NFP Report for August is predicted to show 160K job additions and an unemployment rate of 3.7%. Forex traders can compare this to the US NFP Report for July which showed 164K job additions and an unemployment rate of 3.7%. Private Payrolls for August are predicted to show 150K job additions and Manufacturing Payrolls 5K job additions. Forex traders can compare this to Private Payrolls for July which showed 148K job additions and Manufacturing Payrolls which showed 16K job additions. The Average Work Week for August is predicted at 34.4 hours. Forex traders can compare this to the Average Work Week for July which was reported at 34.3 hours. Average Hourly Earnings for August are predicted to increase by 0.3% monthly and by 3.0% annualized. Forex traders can compare this to Average Hourly Earnings for July which increased by 0.3% monthly and by 3.2% annualized. The Labor Force Participation Rate for August is predicted at 63.0%. Forex traders can compare this to the Labor Force Participation Rate for July which was reported at 63.0%.
Here are the key factors to keep in mind today for Canadian Dollar trades:
- Canadian Employment Report: The Canadian Employment Report for August is predicted to show the addition of 20.0K jobs and an Unemployment Rate of 5.7%. Forex traders can compare this to the Canadian Employment Report for July which showed the loss of 24.2K jobs and an Unemployment Rate of 5.7%. Hourly Earnings for Permanent Employees for August are predicted to increase by 4.5% annualized. Forex traders can compare this to Hourly Earnings for Permanent Employees for July which increased by 4.5% annualized. 17.5K Full-Time Positions and 7.0K Part-Time Positions are expected to have been created in August. Forex traders can compare this to the loss of 11.6K Full-Time Positions and to the loss of 12.6K Part-Time Positions which were reported in July. The Labor Force Participation Rate for August is expected at 65.6%. Forex traders can compare this to the Labor Force Participation Rate for July which was reported at 65.6%.
- Canadian Ivey PMI: The Canadian Ivey PMI for August is predicted at 55.2. Forex traders can compare this to the Canadian Ivey PMI for July which was reported at 54.2.
Should price action for the USDCAD remain inside the or breakdown below the 1.3190 to 1.3245 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.3215
- Take Profit Zone: 1.3015 – 1.3060
- Stop Loss Level: 1.3285
Should price action for the USDCAD breakout above 1.3245 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3285
- Take Profit Zone: 1.3380 – 1.3430
- Stop Loss Level: 1.3245
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