• The US economy added only 12,000 jobs in October.

• Canada’s economy made no change in August.

• The US core PCE increased by 0.3%, leaving Fed rate cut bets unchanged.

The USD/CAD price analysis shows new bearish sentiment as the dollar collapses after a dismal employment report. Meanwhile, the Canadian dollar is ending October with its largest monthly loss in two years. Meanwhile, market participants remained cautious ahead of the US presidential election.

Data on Friday revealed that the US economy added only 12,000 jobs in October, a massive decline from the previous month. At the same time, it was well below estimates of 106,000 jobs. Meanwhile, the unemployment rate held steady at 4.1%.

This week, the US dollar paused its rally as data showed a mixed picture of the economy. As expected, the core PCE increased by 0.3%, leaving Fed rate cut bets unchanged. Meanwhile, unemployment claims eased more than expected, showing tight labor market conditions. However, the employment cost index dropped.

Meanwhile, the Canadian dollar strengthened but remained near a 12-week low on Friday after lackluster domestic data and a drop in risk appetite. Data on Thursday revealed that Canada’s economy made no change in August. The pause came after a 0.1% expansion in the previous month.

Markets are betting on more rate cuts by the Bank of Canada after it made a massive move at the last meeting. BoC governor Tiff Macklem noted that the central bank would continue lowering borrowing costs if the economy performs as expected. At the same time, the loonie fell due to poor risk appetite. Market participants have gradually grown risk-averse due to the uncertainty surrounding the upcoming US presidential election.

USD/CAD key events today

• ISM Manufacturing PMI

USD/CAD technical price analysis: Bears battle for control at the 30-SMA

On the technical side, the USD/CAD price is testing the 30-SMA line, a sign that bears are challenging the uptrend. The price has remained in a bullish trajectory, trading above the 30-SMA, with the RSI above 50.

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However, the RSI has been showing fading momentum, as it has made a bearish divergence. If bears strengthen further, the price will break below the SMA to retest the 1.3825 support level. Such an outcome would indicate a shift in sentiment and likely reversal. On the other hand, if the SMA holds firm, bulls might reach the 1.3950 resistance.

https://www.forexcrunch.com/blog/2024/11/01/usd-cad-price-analysis-dollar-slips-after-weak-nfp/