The Canadian Dollar (CAD) experienced a quiet day on Thursday, largely influenced by broader market trends as traders anticipate the release of Canadian labor figures on Friday. The lack of domestic economic data left the CAD unsupported, resulting in a flat performance against the Greenback.
Market Drivers:
- US Initial Jobless Claims: The number of Americans filing for unemployment benefits fell to 233K for the week ended August 2, below the forecast of 240K and previous week’s revised figure of 250K.
- Canadian Employment Data: Friday’s release of Canadian Net Change in Employment for July is expected to show a recovery from the previous period’s contraction. However, the Canadian Unemployment Rate is also projected to tick higher.
Technical Analysis:
The Canadian Dollar is currently showing slight gains against the US Dollar, but the overall trend remains flat. The USD/CAD pair is approaching the 50-day Exponential Moving Average (EMA) at 1.3731. Long-term traders are watching for further easing towards the 200-day EMA at 1.3623, while a potential technical bounce from the divergence zone between the 50-day and 200-day EMAs is also possible.
Outlook:
The Canadian Dollar’s recent gains could be short-lived as technical barriers approach. The upcoming Canadian labor data release on Friday is expected to be a key catalyst for the currency’s next move.
