Eyes on Jerome Powell’s testimony

Market participants are anticipating a series of upcoming economic events.
Investors will be paying attention to the US ADP Employment Change and the JOLTS Job Openings as economic releases come out.

Last month’s ADP Employment Change came in lower than expected. However, the NFP showed a significant increase, with +300K creating new jobs. It would be interesting to see if the previous data is revised or not in today’s release.

A weaker-than-expected data release today would raise questions about the credibility of last month’s NFP, particularly if JOLTS Job Openings come in line with or below market expectations.

Powell testimony remains the key

During the US session today, all eyes will be on Federal Reserve Chair Jerome Powell as he testifies before the House Financial Services Committee in Washington, DC.

A written statement is expected to be released shortly before it is read at the House. This statement is likely to have a significant impact on the markets, depending on whether it provides any new clues regarding the timing of the first rate cut.

Bank of Canada set to keep rates on hold

According to a Bloomberg survey, the Bank of Canada is expected to announce its decision to keep the current policy on hold in the upcoming few hours. However, the tone of the bank matters the most in today’s decision.

In its previous decision, the Bank hinted that it might have finished increasing rates. Hence, any indication in today’s decision of another rate hike or the decision to maintain higher rates for a longer period would act as a new driver for CAD strength.

During the session, if there are any hints of a potential rate cut or a dovish statement, this is likely to put more pressure on CAD.

USDCAD bearish technical outlook

USDCAD has been trading within a narrow range for the past five sessions, while facing a strong resistance at 1.36. A bearish reversal pattern is visible on shorter time frames.

On the daily chart, the currency pair has been in an upward correction phase since December of last year. Currently, it is approaching the 61.8% retracement level from its decline last year. Additionally, based on the time/price method, it appears that the upward correction phase is coming to an end.

As long as the pair trades below the resistance level of 1.3630 without any daily or weekly close above it, the bearish outlook will remain unchanged.

DXY retesting support

The US Dollar Index has been trading in a narrow range for two weeks. The time/price method indicates that the upside retracement has ended.

In the meantime, the index is retesting its solid support at 103.65. A break of this support would increase the downside pressure.

The index’s next support levels are at 103.30 and 103.00, respectively. The bearish outlook remains unchanged unless the index trades above 104.0 and 104.50 with a daily or weekly close above these levels.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

Disclaimer
This is a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. The information contained herein does not constitute a personal recommendation and does not consider your personal investment objectives, investment strategies, financial situation or needs. Squared Financial makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on a recommendation, forecast, or other information supplied by Squared Financial.

The information on this site is not intended for any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.