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Directionless USD/CAD Awaits Employment Data

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Directionless USD/CAD Awaits Employment Data

The USDCAD traded within a broad range Tuesday, as forex traders await employment data amid signs Canada’s Keystone XL pipeline may get US approval.

The pair plunged to 1.1048 in North America, the lowest level since January 22. As of 19:00 GMT, the USDCAD was trading at 1.1065, a loss of 50 pips. The pair has lost more than 1 percent since last Thursday after gaining more than 4 percent the previous four weeks. Initial support is found at 1.1022. Below that level, support is descending at 1.0994 and 1.0967. On the upside, technical resistance is ascending at 1.1117, 1.1145 and 1.1173.

The Canadian dollar received a boost amid growing optimism the Keystone XL pipeline will get US approval. The controversial pipeline, which would distribute crude from Alberta’s oilsands to the Gulf of Mexico, could help significantly boost Canada’s export market. On Friday the US government said the pipeline would produce less greenhouse gas emissions than conventional shipping methods.

As of Tuesday, the forex market was still digesting weaker than forecast US manufacturing data. Official data from the Commerce Department today showed factory orders slumped 1.5 percent in December, thanks to declining demand for transportation equipment. At the same time, traders began looking forward to Friday’s nonfarm payrolls report. The ADP Institute will release unofficial nonfarm payroll estimates tomorrow. US employers added around 185,000 private payrolls last month, according to most forecasts.

Like the United States, Canada too will produce official employment figures Friday. The Canadian economy added 17,500 jobs last month, according to a median forecast of economists in a Reuters survey. The unemployment rate fell from 7.2 percent to 7.1 percent, according to the same forecast.

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