USD/CAD bids to prolong the early Asian session recovery from the weekly low, but buyers of the Loonie pair lack confidence at 1.3535. Pre-data consolidation and a decline in WTI crude oil provided a floor for prices following a three-day losing streak.

WTI crude oil lost near $81.30, ending a two-day gain streak. Despite mixed China PMI data and stimulus updates, black gold fails to boost US inventory and weaker US Dollar.

China’s NBS Manufacturing PMI for August rose to 49.7, while the Non-Manufacturing PMI reached 51.0. The People’s Bank of China (PBOC) plans to increase loans to private companies as part of its efforts to stimulate the private sector economy.

The US Dollar Index (DXY) is under pressure at 103.10, pushing 200-DMA support and attempting to end a losing streak. Traders seek dovish signs from the US Federal Reserve.

Bears in the USD/JPY were disappointed by the Nonfarm Payrolls (NFP) data because the ADP Employment Change fell to 177K from 195K. The US GDP annualized for the second quarter fell to 2.1% from 2.4%, while the GDP Price Index slowed to 2.0%. Prices for personal consumption expenditures also decreased by 2.5%. The housing market and US Consumer Confidence statistics supported dovish central bank predictions and weighed on the US Dollar.

With caution in the air ahead of crucial US data, the S&P 500 Futures struggle against this backdrop to keep up with Wall Street’s advances. The benchmark US 10-year Treasury note yields, however, are still under pressure and are currently at their lowest points in three weeks (4.11% as of press time).

The US Core PCE Price Index for August is expected to remain constant at 0.2% MoM but increase to 4.2% YoY from 4.1%. Future direction will be crucial, with Canada’s Current Account Balance and mid-tier US manufacturing and employment data also crucial.

Technical Assessment
Unless it produces a daily closing above the 10-DMA barrier of about 1.3560, the USD/CAD comeback seems unlikely

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