Fundamental analysis of USD/CAD for February 3, 2016

After many false breaks of the channel from April 2016, the CAD has finally broken the rising channel support indicating a huge leap down towards 1.25. The US revealed a good non-farm payroll report today that showed the figure of 227K vs. 170K forecasted. However, on the other hand the unemployment rate has increased by 0.1%, which was expected to be unchanged, and currently the jobless rate stands at 4.8%. The ISM non-manufacturing PMI data also had a negative score of 56.5 against 57 expected. Though the USD is having quite a good number of high-impact news this week, it failed to dominate the CAD as the reports turned out to be downbeat. It is expected that market will keep trading against the USD until the next FOMC meeting announces some positive news about monetary policy.

From the technical point of view, the pair has shown a greater volatility after the break of the channel resistance. Currently, the pair is below the 20 EMA and the channel resistance and is indicating a bullish rejection in the daily candle. It is expected that next week the pair will retrace towards the 20 EMA and then show some bullish rejection and bearish pressure to sell in this instrument with the target of the 1.25 zone.


The material has been provided by InstaForex Company -