USD/CAD Fell After U.S PMI data

Fundamental Analysis

* PMI Drag: The USD/CAD pair was traded in a softer tone after the release of PMI data from S&P Global. According to data, the US Composite Purchasing Managers Index (PMI) fell slightly to 54.1 in August’s flash estimate. While the figure came in higher than expected of 53.5, it was the lowest level in four months, from 54.3 in July. Meanwhile, Manufacturing PMI dropped to 48 in the same period from 49.6, Besides that, market also digest the recent FOMC Minutes where it showed that the “vast majority” of FOMC participants supported the case to lower the interest rate at the upcoming September meeting if data met expectations. Investors have priced in a 100 basis points (bps) of a Fed total rate cut by year-end.

Technical Analysis

* Technical Breakout: USDCAD was traded lower following prior retracement from its high level. MACD which illustrate diminishing bullish momentum suggest the pair to likely extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.35500. Conversely, a potential reversal is also to be expected and the price could head back towards 1.36350.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, investors will look towards US Federal Reserve (Fed) Chair Jerome Powell’s speech at the Jackson Hole Symposium as Any additional dovish comments from Fed officials might continue to undermine the USD against the Loonie.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and Canada data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.