Canadian Dollar steady after packed US economic calendar

• US positive labor market data was initially bearish on the USD, but the currency recovered losses.
• The ISM Manufacturing PMI came in weaker than expected, suggesting a contraction in the manufacturing sector.
• Canadian Dollar remains under pressure due to rate cut expectations.

The USD/CAD currency pair saw a mild decline in Friday’s session, reaching a low of 1.3920. Positive labor market data in the United States, including a steady Unemployment Rate and rising Average Hourly Earnings, initially weighed on the USD, but the currency later recovered its losses. A weaker-than-expected ISM Manufacturing PMI also influenced market sentiment.

Additionally, expectations of further interest rate cuts by the Bank of Canada (BoC) continue to exert downward pressure on the Canadian Dollar.

Daily digest market movers: Canadian Dollar mildly declined after mixed US data

• Nonfarm Payrolls in the US rose by 12,000 in October, missing the market expectation of 113,000 by a wide margin.
• The Unemployment Rate remained steady at 4.1% as expected, while Average Hourly Earnings rose expectedly by 4.0%.
• The immediate effect of the labor market data was bearish on the US Dollar, while it recovered all intraday losses.
• The ISM Manufacturing PMI for October has come in surprisingly weak, declining to 46.5 compared to expectations of 47.6.
• Rising expectations of more interest rate cuts by the BoC continue to weigh on the CAD.
• The BoC has already reduced its key borrowing rates by 125 basis points to 3.75% this year.

USD/CAD technical outlook: Bulls start to give up, consolidation coming

The Relative Strength Index (RSI) is in the overbought area with a value of 76, however, the RSIhas formed a declining slope. This suggests that buying pressure is declining, similar to the direction given by the lower green bars of the Moving Average Convergence Divergence (MACD).

Supports: 1.3870, 1.3850, 1.3830, Resistances: 1.3930, 1.3950, 1.3980.