- The number of job vacancies in the US decreased in March.
- The US central bank will likely increase its benchmark overnight interest rate by 25bps.
- The Canadian dollar declined against the US dollar as oil prices fell.
Today’s USD/CAD forecast is bullish. USD/CAD rose despite dollar weakness as the Canadian dollar extended its decline. The dollar fell as the number of job vacancies in the United States decreased in March. Additionally, the number of layoffs reached its highest level in over two years, indicating a possible softening of the labor market.
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Data showed there were 1.6 open positions for every unemployed individual in March. This was the lowest level since October 2021.
Moreover, officials from the Fed are keeping a close eye on this ratio, which is still above the 1.0-1.2 range. This range is consistent with a jobs market that isn’t resulting in too much inflation.
On Wednesday, the US central bank will likely increase its benchmark overnight interest rate by 25bps, bringing it to a range of 5.00%-5.25%.
Oil fell on Tuesday because risk appetite faded ahead of interest rate decisions by the Fed and the ECB this week. As a result, the Canadian dollar declined against the US dollar and most other G10 currencies.
Eric Theoret from Manulife Investment Management said there was “definitely risk aversion across asset classes. The sharp decrease in crude prices compounds the weakness and pushes the CAD lower.”
Oil dropped by more than 5%, and Wall Street stocks fell as investors fretted about a potential US debt default.
USD/CAD key events today
Investors will watch key economic releases from the US. These releases include the private sector payrolls report, PMI data, and crude oil inventories. They will also focus on the Fed policy meeting.
USD/CAD technical forecast: Bears to face 1.3650 hurdle
The bias for USD/CAD in the 4-hour chart is bullish. The price is trading above the 30-SMA, and the RSI supports bullish momentum above 50. On a larger scale, the price oscillates with support at 1.3530 and resistance at 1.3650.
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At the moment, the price is trading closer to the range resistance. It has broken above the 30-SMA, and will likely retest it before going for 1.3650. A break above the range resistance could see the bullish trend resume.
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