The US currency managed to regain some ground in the first half of the week, yet no solid foundation for sustained growth has emerged. Market participants remain cautious, weighing both the latest macroeconomic data and expectations ahead of the release of the US non-farm payrolls report (NFP). This publication is traditionally regarded as a key indicator for assessing the Federal Reserve’s next steps and is capable of setting the tone for markets in the coming weeks. Meanwhile, with persistent pressure on the dollar, more analysts are expecting an increase in net short positions by the end of September.

Today’s statistics from the US and Canada add to market nerves: jobless claims, business activity indices (PMI), and trade balance figures could adjust short-term expectations. Another driver is Canadian labour market data (5 September at 15:30 GMT+3), which could influence the dynamics of the USD/CAD pair.

USD/CAD

Following the formation of a bullish engulfing pattern on the daily timeframe, the USD/CAD pair managed to test key resistance at 1.3800. Technical analysis of USD/CAD points to potential strengthening towards 1.3860–1.3900 if the 1.3800 level turns into support. A pullback from current levels could trigger a decline towards 1.3720–1.3760.

Factors that could influence USD/CAD movement:

• Today at 15:15 (GMT+3): ADP US non-farm employment change
• Today at 15:30 (GMT+3): US initial jobless claims
• Today at 15:30 (GMT+3): Canada trade balance

USD/JPY

Yesterday, USD/JPY buyers made another attempt to break out of the medium-term sideways range of 146.40–148.60. The test of 149.00 ended in a sharp pullback, sending the price back into the previously established corridor. It seems investors are holding off on fresh positions while awaiting new data.

Factors that could influence USD/JPY movement:

• Today at 17:00 (GMT+3): US ISM non-manufacturing PMI
• Tomorrow at 15:30 (GMT+3): US average hourly earnings
• Tomorrow at 15:30 (GMT+3): US non-farm payrolls and unemployment rate

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