USD/CAD steady as US jobless claims slide

USD/CAD is steady in Thursday trade. The pair is currently trading at 1.3283, up 0.13%. On the fundamental front, US jobless claims were better than expected. There are no Canadian events on the schedule.

US Unemployment Claims Beat Forecast

The employment picture in the US has been grim since March, as unemployment has skyrocketed in the wake of the Covid-19 pandemic. This has put a magnifying glass on unemployment claim releases, which are published each week. The indicator has moved higher in the past two weeks, but there was a welcome reversal on Thursday, as jobless claims dropped to 1.18 million, down sharply from 1.43 million beforehand. The reading surprised analysts, who had projected a gain of 1.41 million.

USD/CAD hasn’t shown much reaction to the strong unemployment claims release, but that could change on Friday, as both Canada and the US release key employment numbers. Investors will be glued to US nonfarm payrolls, which is often a market-mover. The forecast for July stands at 1.55 million, a respectable number. However, this is much lower than the previous release of 4.80 million. As well, the ADP nonfarm payroll, which was released earlier this week, slowed to 167 thousand, well off the estimate of 1.2 million. If the official NFP release follows suits and misses the estimate by a country mile, the US dollar could lose ground against its Canadian cousin.

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USD/CAD Technical

USD/CAD dipped in the Asian session but then recovered. USD/CAD showed slight gains in European trade and has posted further gains in the North American session.

• USD has tested resistance at 1.3320 in the North American session. The 10-day MA is acting as resistance at 1.3356. This is followed immediately by resistance at 1.3374
• There is support at 1.3223. 1.3180 is the next support level

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