USD/CAD Bullish Trend Hinges on ISM Data
The current USD/CAD outlook remains cautiously bullish, but the upcoming ISM Non-Manufacturing PMI data will play a critical role in shaping the pair's next move.
Positive Factors for USD/CAD:
Strong US Data: The recent ISM Manufacturing PMI was strong, indicating resilience in the US economy. If the Non-Manufacturing PMI also shows growth, particularly in the services sector (a large part of the US economy), it would further strengthen the USD, pushing USD/CAD higher.
Hawkish Fed Outlook: The Federal Reserve has indicated it may keep rates elevated for a longer period if inflation remains a concern. Any robust economic data like a positive ISM print would reinforce this outlook, making USD more attractive to investors and pushing USD/CAD upwards
Potential for a Bearish Turn (Bullish for CAD):
Weaker ADP Employment Report: The ADP Employment report showed weaker-than-expected job growth, which could signal a slowdown in the US labor market. If the ISM Non-Manufacturing PMI data follows a similar pattern with weaker-than-expected numbers, it may lead to a bearish correction in USD. A softer labor market will reduce the pressure on the Fed to keep rates high, weakening the USD.
Oil Prices: CAD is closely linked to oil prices, and any upward movement in oil can strengthen the Canadian dollar. If ISM data disappoints and leads to a weaker USD, combined with rising oil prices, USD/CAD could see more downside.
What's Next ?
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While the current technical and fundamental indicators lean toward a bullish trend for USD/CAD, the upcoming ISM Non-Manufacturing data will be crucial. If the data surprises to the downside, it could trigger a bearish USD correction, allowing CAD to gain strength. On the flip side, strong ISM data would likely reinforce the bullish USD/CAD trend. Traders should be prepared for volatility based on this key economic release.
Positive Factors for USD/CAD:
Strong US Data: The recent ISM Manufacturing PMI was strong, indicating resilience in the US economy. If the Non-Manufacturing PMI also shows growth, particularly in the services sector (a large part of the US economy), it would further strengthen the USD, pushing USD/CAD higher.
Hawkish Fed Outlook: The Federal Reserve has indicated it may keep rates elevated for a longer period if inflation remains a concern. Any robust economic data like a positive ISM print would reinforce this outlook, making USD more attractive to investors and pushing USD/CAD upwards
Potential for a Bearish Turn (Bullish for CAD):
Weaker ADP Employment Report: The ADP Employment report showed weaker-than-expected job growth, which could signal a slowdown in the US labor market. If the ISM Non-Manufacturing PMI data follows a similar pattern with weaker-than-expected numbers, it may lead to a bearish correction in USD. A softer labor market will reduce the pressure on the Fed to keep rates high, weakening the USD.
Oil Prices: CAD is closely linked to oil prices, and any upward movement in oil can strengthen the Canadian dollar. If ISM data disappoints and leads to a weaker USD, combined with rising oil prices, USD/CAD could see more downside.
What's Next ?
-----------------
While the current technical and fundamental indicators lean toward a bullish trend for USD/CAD, the upcoming ISM Non-Manufacturing data will be crucial. If the data surprises to the downside, it could trigger a bearish USD correction, allowing CAD to gain strength. On the flip side, strong ISM data would likely reinforce the bullish USD/CAD trend. Traders should be prepared for volatility based on this key economic release.
Trade closed: target reached
USD/CAD Expect Level Reached @1.35739 ✅✅✅
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.