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Data from Canada Made Pair Move
11/8/2022 11:51 AMThe US dollar is testing 1.3520 for a breakout. The American currency is recovering after the publication of a report on the US labor market at the end of last week, which reflected an increase in Nonfarm Payrolls by 261.0 thousand in October, with a forecast of 200.0 thousand, an increase in the Unemployment Rate from 3.5% to 3.7%, and the continued increase in Average Hourly Earnings.
In turn, Canadian statistics contributed to the development of negative dynamics for the instrument. The Net Change in Employment in October rose by a record 108.3 thousand after an increase of 21.1 thousand in the previous month, while analysts expected only 10.0 thousand. However, investors believe that the Bank of Canada will continue the "hawkish" monetary policy, and in December will also raise interest rates by 0.50%, not 0.25%. At the same time, the results of the November survey on the national labor market and the report on the Consumer Price Index for October will be published before the meeting, which will also affect the decision of the financial authorities. In addition, the Average Hourly Wages in October corrected to 5.5% from 5.2% in the previous month, posting above 5.0% for the fifth straight month. At the same time, the Unemployment Rate remained at the previous level of 5.2%, contrary to preliminary forecasts of a correction to 5.3%. Only data on business activity disappointed investors: the October Ivey Purchasing Managers Index fell from 55.9 points to 51.4 points.
Bollinger Bands in D1 chart demonstrate a stable decrease. The price range changes slightly, limiting the potential for the development of "bearish" dynamics in the short term. MACD is going down preserving a stable sell signal (located below the signal line). The indicator is trying to consolidate below the zero level. Stochastic shows a more confident downtrend; however, at the moment it is located in close proximity to its lows, indicating the risks of the US dollar being oversold in the ultra-short term.
Resistance levels: 1.3550, 1.3600, 1.3650, 1.3700. | Support levels: 1.3500, 1.3440, 1.3356, 1.3300.
