Daily Market Report – USD/CAD Potential Buying Opportunity Building? August 04, 2017

USD/CAD Can Bulls Defend Downside?

USD/CAD changed little today, but you should be aware that we may have a high volatility later as the US and Canada are to release high impact data. Price has bounced back this week, but has already find a temporary resistance.

USD needs a bullish spark from the US data to be able to climb much higher in the upcoming period, some positive US data and negative Canadian reports will send the pair much higher on the short term. Price will be driven by the fundamental factors, remains to see the direction.

Canadian Unemployment Rate may remain steady at 6.5% for the second month in July, the trade deficit could increase from 1.1B to 1.3B in June, while the employment Change may drop to 13.1K, from 45.3K.

The US data will shake the currency market, the Unemployment Rate is expected to decrease from 4.4% to 4.3% in July, the Average Hourly Earnings may increase by 0.3%, more than the 0.2% growth in the former reading period, while the Trade Balance could increase from -46.5B to -43.9B.

The main event will be the publication of the NFP, which is expected to be reported at 182K jobs in July, lower versus the 222K in the former reading period.

Price is still expected to reach and retest the median line (ml) of the minor descending pitchfork after the failure to reach the lower median line (lml) of this pitchfork. We may have a broader rebound in the upcoming weeks if the rate will stay above the 1.2460 major static support. The next major upside target will be at the median line (ML) of the red descending pitchfork. Resistance can be found also at the median line (ml) and higher at the 1.2678 static obstacle. A further drop will be confirmed only by a valid breakdown below the 1.2413 previous low.

Brent Oil Rejected Again

Brent Oil slips lower after another failure to close above the 53.03 major static resistance. A USD/CAD further increase will send the rate much below the $51.00 per barrel.

Technically is somehow expected to decrease after the false breakout above the upside line of the minor ascending channel, could be attracted by the confluence between the SL with the downside line of the minor ascending channel if the US data will impress.

GBP/USD Just A Minor Pullback?

Price is bloodless right now, the participants are undecided ahead the US data release. The US figures will bring life on this pair. GBP/USD remains bullish as long as the 1.3046 and the warning line (wl1) are still intact, a breakdown below these obstacles will signal a major drop.

By Olimpiu Tuns

Market Analyst

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