USD/CAD Exchange Rate Prediction – The Dollar Rises Ahead of Private Payrolls Report

USD/CAD moved slightly higher as U.S. Treasury yields rose. The focus for currency traders appears to have fallen on the employment picture following Friday’s commentary from Fed Chair Jerome Powell. Friday’s speech by Fed Chair Jerome Powell showed that the central bank believes there is a long way to go to repair the decline in overall employment. On Wednesday, the U.S. will release ADP private payrolls and the ISM manufacturing report.

Technical Analysis

The USD/CAD edged higher. Support is seen near the 200-day moving average at 1.2541. Resistance is seen near the 10-day moving average at 1.2646. 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).

ADP On Deck

On Tuesday ADP and Macro-Economic Advisors will release their private-sector job estimate.  The median expectation is for 625k after a 330k increase in July.  Ahead of the national ISM report, the Chicago Purchasing Managers Index was released by ISM-Chicago dropped to 66.8 in August from 73.4 in July, reflecting a decline in manufacturing activity across the heart of the mid-West. This reading came in lower than the market expectation of 68.