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Daily Forex News and Watchlist: USD/CAD

November 1, 2023| Forex Market

USD/CAD is consolidating ahead of the Fed’s November statement!

Which way will the pair go in the next trading sessions?

Before moving on, ICYMI, yesterday’s watchlist checked out NZD/USD’s uptrend resistance ahead of New Zealand’s labor market reports. Be sure to check out if it’s still a good play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Canada GDP read for August: 0.0% m/m (0.1% m/m forecast; 0.0% m/m previous)

U.S. quarterly employment cost index: 1.1% in Q3 (1.0% q/q forecast and previous)

S&P house price index: 2.2% y/y in August (1.8% forecast; 0.2% in July)

FHFA house price index: 0.6% m/m in August (0.5% forecast, 0.8% in July)

ISM Chicago PMI edged down from 44.1 to 44.0 in October; “Production was the largest downside driver, while supplier deliveries and order backlogs also contributed

U.S. Conference Board consumer confidence dipped from 104.3 to 102.6 in October; “Consumers continued to be preoccupied with rising prices

ECB member Joachim Nagel: “Interest rates will have to remain at a sufficiently high level for a sufficiently long time

In its Financial Stability Report, the RBNZ noted that “The full impact of previous monetary policy tightening is yet to be seen and there is a risk further tightening will be needed to bring inflation back within central banks’ targets

New Zealand’s unemployment rate climbed to a two-year high of 3.9% in Q3 as expected; Wage inflation slowed from 1.1% to 0.8% (vs. 1.0% expected); Employment growth slowed down by 0.2% (vs. 0.4% forecast, 1.0% previous)

Price Action News

Overlay of NZD vs. Major Currencies

Overlay of NZD vs. Major Currencies Chart by TradingView

One of the biggest economic releases in the last few hours is New Zealand’s quarterly labor market data missing its expectations for Q3.

NZD unsurprisingly lost pips across the board early in the Asian session. In fact, the weak report probably made it easy for NZD bears to drag the comdoll to new intraday lows before the London session started.

Luckily, a bit of risk-taking erased most of NZD’s losses. As of writing, NZD is trading in the green against EUR and CAD but is still in the red against JPY, CHF, and AUD.

Upcoming Potential Catalysts on the Economic Calendar:

U.K. final manufacturing PMI at 9:30 am GMT
U.S. ADP report at 12:15 pm GMT
SNB Chairman Jordan to give a speech at 12:40 pm GMT
U.S. ISM manufacturing PMI at 2:00 pm GMT
U.S. JOLTS job openings at 2:00 pm GMT
FOMC statement and presser at 6:00 pm GMT
BOC Gov. Macklem to give a speech at 8:15 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

USD/CAD 15-min Forex

USD/CAD 15-min Forex Chart by TradingView

Who else is looking for USD setups to trade today?

If you are, then you should probably take a closer look at USD/CAD as it consolidates in a 20(ish)-pip range after yesterday’s upswing.

The pair may see an increase in demand if today’s ADP report, ISM manufacturing PMI, and JOLTS job openings reports all point to a strong NFP report this Friday.

Of course, USD bulls and bears can just hear from the Fed members themselves. While the FOMC gang is expected to maintain their current monetary policies, traders also won’t be surprised if we hear a hawkish word or two (or fifty) from their statement and presser.

And then there’s the persistent USD strength in the last few weeks. Unless today’s numbers convince convince the markets to price in even more hawkish FOMC biases, there’s a risk of seeing a buy-the-rumor, sell-the-news scenario across major USD pairs.

Keep close tabs on USD/CAD’s range to see if we’ll get a breakout today. A clear break above the 1.3890 opens a potential move to the 1.3900 or R1 (1.3910) Pivot Point line.

But if today’s events inspire profit-taking for USD long trades, then USD/CAD may dip to the Pivot Point (1.3860) line near the 100 SMA and range support zone.

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