COZfx: USD/CAD weekly outlook

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COZforex: The US dollar ended Friday’s session close to a 3-week high against its Canadian counterpart on Friday, after a report showed US employers added fewer jobs in July than forecast, casting doubts over the strength of the US economy and the need for stimulus.

USD/CAD hit session highs of 1.0403, the strongest level since July 18, before settling at 1.0393 at the close of trade, 0.45% higher for the day and up 1.1% for the week. COZFX strategist Nigel Boynton said, USD/CAD is predicted to find support at 1.0296, and a drop through could take it to the next support line of 1.0245. Meanwhile, the pair is predicted to find its first resistance at 1.0382, and a rise through could take it to the next resistance line of 1.0417.

The Department of Labour said the US economy added 162,000 jobs in July, less than the 184,000 increase forecast by economists. June's figure was revised down to 188,000 from a previously reported 195,000. The unemployment rate ticked down to 7.4% from 7.6% in June, due in part to more people leaving the labour force.

The data came amid growing uncertainty over the future of the US central bank’s stimulus program, after the Fed said on Wednesday that it would keep buying USD85 billion a month in mortgage and Treasury securities and gave no hint of plans to taper its bond-buying program.

Elsewhere, in Canada, official data showed on Wednesday that the country’s economy grew at a seasonally adjusted rate of 0.2% in May, in line with expectations, after growth of 0.1% the previous month.

In the week ahead, the US is to publish data on service sector activity as well as a report on the trade balance to further gauge the strength of the US economy.

Investors have closely been looking out for US data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

(COZ forex UK)