USD/CAD plunged much below several support levels after the release of the first United States data. The figures have come in worse than expected and have invalidated a potential upside movement. The greenback is demolished once again by the United States economy. Unfortunately, the poor numbers will most likely force the Federal Reserve to keep the Federal Funds Rate on hold till next year.
The USD sellers have taken the lead again and seems motivated to drag the currency to new lows in the upcoming period. Right now I don’t see how the USD could turn to the upside, maybe only a severe oversold will bring the bulls in the market again.
The US Unemployment Rate increased unexpectedly, from 4.3% to 4.4% in August, even if the traders have expected to see a 4.3% growth, while the NFP registered the lowest level of the last three months, was reported at 156K, much below the 180K estimate and versus the 209K in the former reading period. Moreover, the Average Hourly Earnings rose only by 0.1%, less versus the 0.2% estimate.
The US is to release more data in the upcoming hours, but I don’t see them capable to save it from the downside.
You can see that the rate has dropped much below the 1.2460 static support, lower median line (LML) of the black ascending pitchfork, median line (ml) of the minor descending pitchfork, the warning line (wl5) and the lower median line (lml) of the black descending pitchfork.
It was almost to reach the lower median line (LML) of the major descending pitchfork, could still react this level if the US data will continue to disappoint later. Only a failure to reach the LML will signal a major oversold and a potential rebound.
