The recent positive labor market data in the United States initially had a bearish impact on the USD, causing the currency to decline. However, it later recovered its losses as the ISM Manufacturing PMI came in weaker than expected, indicating a contraction in the manufacturing sector. This mixed data influenced market sentiment, leading to a mild decline in the USD/CAD currency pair, which reached a low of 1.3920.
The Nonfarm Payrolls in the US rose by 12,000 in October, falling short of the market expectation of 113,000. Despite this, the Unemployment Rate remained steady at 4.1% as expected, and Average Hourly Earnings rose by 4.0%. The bearish effect on the US Dollar was temporary, as the currency managed to recover all intraday losses. Additionally, the BoC is expected to cut interest rates further, putting pressure on the Canadian Dollar.
The BoC has already reduced its key borrowing rates by 125 basis points to 3.75% this year. The declining trend in the RSI and lower green bars of the MACD suggest a decrease in buying pressure for the USD/CAD pair. Supports for the pair are at 1.3870, 1.3850, and 1.3830, while resistances are at 1.3930, 1.3950, and 1.3980. The Canadian Dollar is likely to see consolidation in the near future as bulls start to give up and market sentiment remains uncertain.
