USD/CAD retraces losses above mid-1.24s on upbeat ADP employment data
After easing to a fresh session low at 1.2450, the USD/CAD pair staged a modest recovery in the early NA session amid a higher-than-expected private employment growth. As of writing, the pair was trading at 1.2475, losing only 12 pips, or 0.1%, on the day.
Although private sector employment increased by 135,000 on a monthly basis following a 228,000 rise in September, this data came above the market expectation of 125,000. Commenting on today's release, Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said that Hurricane's Harvey and Irma impacted smaller retailers negatively, causing a dip in hiring in September. The US Dollar Index, which dropped to a fresh 2-day low at 93.10 ahead of the data, is now at 93.25, still losing 0.18% on the day.
- US: Private Sector Employment Increased by 135,000 Jobs in September - ADP
In the meantime, after testing the critical $50 handle earlier in the day, the barrel of West Texas Intermediate gained traction and recovered its daily losses to trade at $50.40, helping the commodity-sensitive loonie keep its poise against the greenback.
Later in the session, the Markit and the ISM will be releasing their non-manufacturing PMI data for the United States. Earlier in the week, the PMI data showed that the business activity in the manufacturing sector accelerated at a faster-than-expected pace and lifted the US Dollar Index higher, suggesting that a positive data today could trigger a similar reaction. Moreover, the Fed Chairwoman Janet Yellen will be delivering a speech, however, she is not expected to provide any remarks on the monetary policy.
- UK services PMI and Yellen speech amongst market movers today – Danske Bank
The immediate resistance for the pair aligns at 1.2500 (psychological level) ahead of 1.2550 (Aug. 29 high) and 1.2635 (Aug. 30 high). On the downside, supports could be seen at 1.2435 (50-DMA), 1.2400 (psychological level) and 1.2345 (20-DMA). The RSI indicator on the daily graph is staying sideways a little above the 50 neutral mark, not providing any directional clues for the near-term.