The US dollar showed a mixed performance: a weak ADP employment report (-32k versus the forecast of growth) heightened doubts over the resilience of the labour market, while uncertainty surrounding a US government shutdown added further pressure on the greenback. Markets are pricing in risks of delayed publication of key economic data, including the nonfarm payrolls report, which could complicate the Federal Reserve’s policy decisions in the coming months.

In the USD/JPY pair, the dollar continues to lose ground, falling towards the 147.00 level, where short-term support is located. The pressure is reinforced by a combination of weak US data and stronger demand for the yen as a so-called safe-haven asset. Meanwhile, USD/CAD is consolidating after climbing to 1.3950: the Canadian dollar found support amid the release of business activity data and fluctuations in oil prices, which remain a key driver for the pair.

Near-term moves in the major currency pairs will largely depend on the balance of the news flow and investor reaction to political uncertainty in the United States.

USD/JPY

At the end of September, dollar buyers in the USD/JPY pair almost managed to test the critical resistance level near 150.00. However, the slowdown in bullish momentum allowed dollar bears to seize the initiative, forming a bearish harami candlestick pattern on the daily timeframe. Technical analysis of USD/JPY suggests a potential continuation of the downward movement towards the key range of 146.00–146.50. Bulls, however, may attempt to push the pair back into the 147.90–148.20 zone.

Key events that could influence USD/JPY movements:

• Today at 17:00 (GMT+3): US factory orders;
• Today at 17:30 (GMT+3): Speech by Dallas Fed President Lorie K. Logan;
• Today at 23:30 (GMT+3): Federal Reserve balance sheet.

USD/CAD

Despite the negative backdrop for the dollar, buyers in the USD/CAD pair are confidently holding prices near 1.3900. Yesterday, the pair once again tested 1.3960, but there has been no renewed bullish momentum so far. Technical analysis of USD/CAD points to a sideways trading pattern within the 1.3890–1.3960 range. A breakout beyond this corridor could determine the medium-term trading direction of the pair.

Key events that could influence USD/CAD movements:

• Tomorrow at 16:30 (GMT+3): Canada Services PMI;
• Tomorrow at 16:45 (GMT+3): US Services PMI;
• Tomorrow at 17:00 (GMT+3): US ISM Non-Manufacturing PMI.

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