The USD/CAD has lost all intraday gains after the loonie got a shot in the arm from the stellar employment data. According to the data released by Statistics Canada, 303.1K jobs were added to the Canadian economy in March 2021, which exceeded the 259.2K jobs added in February and also trumped the market expectation of the addition of 101.5K jobs. Also, the unemployment rate dropped from 8.2% in February to 7.5% in March, well below the 8.0% that the markets had predicted.
Despite the strong employment data, a rally in the US long-term yields and floundering crude oil prices helped to limit the Loonie strength, limiting the downside move on the pair.
Going forward, the Loonie is expected to gain more strength as the Bank of Canada may use the improved employment data as a reason to start tapering bond purchases.
The USD/CAD is down 0.13% as of the time of writing.
Technical Levels to Watch
The pair finds itself limited to the south by the ascending trendline that connects the dips of the last three weeks. This trendline must be taken out by the bears for the price to continue the decline towards 1.25006 psychological support. Below this level, the pair may also find support at 1.23946.
On the other hand, a bounce on the ascending trendline sends the pair towards the junction of the channel’s trendline and the 1.26066 resistance line. A break above this level allows the pair to push towards the 1.27469 price level, with a potential pitstop at the 1.27000 psychological resistance. 1.28758 completes the potential short-term upside barrier above the previously mentioned resistance levels.