USD/CAD breaks below 1.3100 after ADP report, focus turns to PMI

Despite of better-than-expected US private sector employment data, the USD/CAD pair failed to gain traction and has now dipped below 1.3100 handle to currently trade at session low level, near 200-day SMA region.  

According to ADP report, US private sector added 179,000 new jobs in July and the reading for June was also revised higher to 176,000. The report failed to assist the pair to build on to its Tuesday's recovery from 1.3000 psychological mark and subsequent up-move on Wednesday. 

Earlier during the day, the major stalled its recovery trend near 1.3150 region as a tepid recovery in crude oil prices supported demand for the commodity-dominated currency, loonie. Hence, the official EIA weekly US oil inventory data, later during NY trading session, will be watched closely for further direction in the USD/CAD pair. 

In the meantime, US ISM non-manufacturing PMI data might provide some immediate momentum play for short-term traders ahead of Friday's key US monthly jobs report (NFP), which would help investors to determine the near-term direction for the greenback.

Key technical levels 

On the immediate downside, 1.3085-80 region (200-day SMA) would be immediate support to watch for, which if broken could drag the pair back towards 1.3000 psychological mark (Tuesday's low). On the upside, sustained move above 1.3120 resistance now seems to assist the pair to surpass 1.3148 resistance (session high) and head towards 1.3186 (July 29 high).