Yesterday I said that, from a technical perspective, it appears that commodity currencies like the Canadian dollar, Australian dollar, and New Zealand dollar may all be due to recoup some of their massive losses.
However, at the end of Thursday’s trading session, AUD/USD and NZD/USD broke below former trendline support, while USD/CAD breach falling trendline resistance dating back to mid-2004. Looking ahead to Friday, the Canadian dollar will be the only commodity currency to face event risk, but it could actually prove to be the news of the day. The Canadian net employment change is forecasted to rise 10K in August compared to drop of 55.2K in July, while the unemployment rate is anticipated to edge up to 6.2 percent. The employment change is notoriously difficult to predict, especially since our main leading indicator for this – the employment component of Ivey PMI – will not be released until later in the morning. As a result, the data should be especially market-moving, with a strong reading likely to push USD/CAD lower, though a disappointing negative result should send the pair surging above noted trendline resistance.
Related article: US NFP and Canadian Employment Data Leverages a USDCAD Setup
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