The US dollar continues to retreat following weaker-than-expected ADP figures, which strengthened expectations of a softer Federal Reserve stance. The US private sector created far fewer jobs than forecast, a development markets interpreted as a sign of potential labour-market cooling after the prolonged shutdown and break in official data releases. Against this backdrop, traders increased their bets on a more dovish tone from the Fed in the coming weeks.

Attention now turns to an incoming batch of macroeconomic reports from the US and Canada. These include US weekly jobless claims and fresh Canadian labour-market data. The releases may play a crucial role in shaping expectations ahead of the Fed’s next meeting: softer numbers would reinforce speculation about an imminent rate cut, while moderately firm data could lend support to the dollar and help stabilise it.

USD/JPY

The three-month USD/JPY uptrend stalled near 158.00. After forming a bearish engulfing pattern, the pair dropped roughly 200 pips and tested key support around 154.60. It is now consolidating close to 155.00.

A recovery towards 156.00–156.20 is possible if US data surprises to the upside. A sustained move below 155.00, however, would open the way for another test of 154.60, and a break of that level would intensify downward pressure.

Key events for USD/JPY:
→ today at 16:30 (GMT+3): US initial jobless claims
→ today at 18:30 (GMT+3): Atlanta Fed GDPNow estimate
→ tomorrow at 18:00 (GMT+3): US core PCE price index

USD/CAD

USD/CAD has once again tested major support at 1.3940 amid disappointing US fundamentals. The pair has held within the 1.3940–1.4000 range for several days, and a breakout in either direction could set the next major trend. A move higher would pave the way towards 1.4050–1.4100, while a downside break would revive bearish momentum with targets near 1.3880.

Key events for USD/CAD:
→ today at 16:30 (GMT+3): Canada trade balance
→ today at 18:00 (GMT+3): Ivey PMI
→ tomorrow at 16:30 (GMT+3): Canadian employment change

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