USD/CAD Exchange Rate Prediction – The Dollar Consolidates Following ISM and ADP Data

USD/CAD moved sideways as the dollar gained little tracking following mixed economic results. On Wednesday the ISM released stronger than expected manufacturing data which showed that new orders and price paid increased. This report was countered by a weaker than expected ADP private payroll report. Since the Fed is focused on employment this private payroll report seemed to gain more attention by traders.

Technical Analysis

The USD/CAD moved sideways. Support is seen near the 50-day moving average at 1.2535. Resistance is seen near the 10-day moving average at 1.2659. Short-term momentum has turned negative the fast stochastic generated a crossover sell signal. Medium-term upward momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Private Payrolls Could Alter Government Data Expectations

Jobs data disappointed on Wednesday ahead of Friday’s Nonfarm payroll report. The government expects that nonfarm payrolls likely increased by 728,000 jobs last month after rising 943,000 in July. According to ADP and Macro-Economic Advisors, the ADP National Employment Report showed that private payrolls increased by 374,000 jobs last month after rising 326,000 in July. Expectations had been for the ADP report to show private payrolls increased by 613,000 jobs.