FxWirePro: USD/CAD extends gain ,scope for further upside

• USD/CAD  extended gain on  Thursday as dollar was supported by data that showed the number of Americans filing new applications for unemployment benefits fell last week.

• New applications for U.S. unemployment benefits declined last week, offsetting the previous week’s rise, though signs of a cooling labor market remain as both worker demand and supply ease.

•  U.S. initial jobless claims dropped by 33,000 to a seasonally adjusted 231,000 for the week ending September 13. This marked a sharp pullback after claims in the previous week had surged to 264,000, the highest level since October 2021.

• The Fed cut rates by 25 bps on Wednesday, with Chair Powell calling it a risk-management move for a weakening labor market, while stressing there’s no rush to ease further.

 •  Powell’s remarks fell short of the “unequivocal dovishness” that markets had been hoping for. While he acknowledged the need for a risk-management rate cut in response to a weakening labor market, his emphasis on a cautious, meeting-by-meeting approach suggested the Fed is not in a rush to aggressively ease policy.

• Immediate resistance is located at 1.3820(50%fib), any close above will push the pair towards 1.3907(38.2%fib).

• Support is seen at 1.3737(61.8%fib) and break below could take the pair towards 1.3705(Lower BB).

Recommendation: Good to buy around 1.3800, with stop loss of 1.3750 and target price of 1.3880