USDCAD TECHS: Bullish Wave

The below is from the MNI Preview for tomorrow's US Payrolls Preliminary Benchmark Revisions, found in full here. 

We see estimates with wide ranges but with a median based on mid-point estimates of around -750k or subtracting just over 60k per month from currently published jobs numbers to Mar 2025. However, these preliminary estimates have a strong tendency of being too negative at point of release – we go into this more below. 

• Fed Governor Waller: Around -60k/month (i.e. circa -720k)
• Speaking on Aug 28 (prior to latest payrolls data and based off 4Q24 QCEW data): “That's the picture after the unusually large revisions to May and June payrolls and the soft reading for July that was included in the latest jobs report. In addition to those revisions, on September 9 we will get a preliminary estimate of what to expect in the annual "benchmark" revisions to 2025 early next year. I estimate that monthly job creation will be reduced by an average of about 60,000 a month. That would mean that private-sector employment actually shrank, on average, in the past three months and that job creation earlier in the year was weaker than currently reported.”
• Waller is a permanent voter and leading contender for next Fed Chair role. He first made these remarks ahead of the July FOMC when he indicated he would push ahead with a call to start cutting rates.
• Tsy Sec Bessent: -800k. “We’re going to get the revisions for last year next week. There may be as big as a 800k downward revision. This would be a second downward revision […] We need good data.” (Sep 7 on NBC’s Meet The Press)

Sellside estimates (see more detailed color below) for Apr 2024-Mar 2025 revisions: 

• Barclays:          Preliminary estimate of -1-1.3mn before -0.8-1.1mn final
• SEB:                 Preliminary estimate of possibly -900k before closer to -700k in the final revision
• BMO:                -800k
• BofA                -500k to -1000k
• GS:                  -550k to -950k or a 45-80k downward revision to average monthly payroll growth
• Nomura:           -600k to -900k
• Wells Fargo:     -475k to -790k
• DB:                   Eyeing -50k to -60k per month, i.e. somewhere around -600k to -720k
• TD Securities:   -590k
• UBS:                -550k

• RES 4: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg  
• RES 3: 1.3925 High Aug 22 and the bull trigger
• RES 2: 1.3868 High Aug 26 
• RES 1: 1.3854 High Sep 05
• PRICE: 1.3824 @ 16:10 BST Sep 8
• SUP 1: 1.3727 Low Aug 27 and a bear trigger  
• SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
• SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle 
• SUP 4: 1.3637 Low Jul 25  

A bull cycle in USDCAD remains in play. Near term, the recovery from the Aug 29 low highlights a potential early reversal signal and if correct, the end of the corrective pullback between Aug 22 - 29. An extension higher would open the bull trigger at 1.3925, the Aug 22 high. Support lies at 1.3727, the Aug 29 low. Clearance of this level would instead reinstate a short-term bear theme and expose 1.3709, a Fibonacci retracement.  

Local media reports the early results of the Norwegian general election, with NRK projecting a majority for the centre-left Labour-led bloc with 89 seats (85 required for a majority) with 73% of votes counted. If correct this means incumbent Prime Minister Jonas Gahr Støre has won a second term in office.

• Among the largest parties, the Labour Party is on track to win 28% of the vote, with the Progress Party 24% and Conservatives 14%, per NRK projections.
• As MNI's election preview scenarios noted, "Labour Leads Minority/Coalition Government – 70% Probability: The most likely outcome of the election is the continuity of the current administration under Labour, either in coalition with other parties of the left, or in a confidence and supply agreement as a minority government. In any case, in order to secure an overall majority, Labour is likely to need the support of the Centre, Socialist Left, Green and Red parties."
• More on implications in our preview here.