The dollar index is consolidating near 102.00. Market activity remains low given that traders maintain a wait-and-see attitude ahead of the US labor market data release on Friday. Earlier, Federal Reserve Chair Jerome Powell noted that the future rate decision depends on macroeconomic data. At the moment, the numbers are disappointing. The ISM Manufacturing PMI registered 46.4 in July, remaining in the stagnation zone. Today ADP report will be released. It will help market participants assess the state of the US labor market. The report is likely to confirm the general weakness of this economic sector, which may put additional pressure on the dollar.
SELL STOP 101.80/TP 101.00/SL 102.10
AUD/USD
The AUD/USD pair is actively falling, trading at 0.6600. The Australian currency came under pressure as the results of the Reserve Bank of Australia (RBA) meeting were released. The regulator kept the interest rate unchanged at 4.10%, while analysts predicted a 25 bps increase. The head of the regulator, Philip Lowe, said that high borrowing costs put pressure on demand and will further curb the growth of consumer inflation. Additional pressure on the Australian dollar came from June data on Australia’s housing market. The number of building permits decreased by 7.7% after a 20% increase a month earlier. Given the above, we recommend shorting AUD/USD with a target of 0.65.
SELL STOP 0.6560/TP 0.6500/SL 0.6580
USD/CAD
The USD/CAD pair is holding near 1.33. According to traders, the local recovery of the pair may be temporary. The Canadian dollar is still supported by rising oil prices – Canada’s most important export resource and strong national statistics, which allows the Bank of Canada to raise the rate again without consequences for the economy. Let’s recall that Brent maintains a positive trend against the background of a decrease in oil production in OPEC+ countries, as well as hopes for China’s economic recovery. On Friday, data on the Canadian labor market will be released. If the report does not disappoint, a decline in the USD/CAD pair will resume.
SELL STOP 1.3270/TP 1.3200/SL 1.3300
