The US Dollar has fallen to 2-month lows against the Loonie, as US election uncertainty increased amid prolonged and contentious vote counting. However, investors are betting on a Joe Biden presidency as he takes the lead in battleground states of Georgia and Pennsylvania.
Employment data from both Canada and the US show reduced unemployment rates and better-than-expected job additions which fell short of the previous month’s figures. Participation rates in the labour market survey also increased in both countries. Participation rate in Canada surpassed that of the US (61.7%), rising to 65.2%, which was above the expectation of 65%.
Today’s decline sent the USDCAD to 2-month lows, finding support at the confluence of the 1.30385 support and the lower edge of the descending channel. Today’s employment data from both countries cancelled each other out. However, with the USD heading into the critical jobs report from a weakened standpoint, the CAD has reversed intraday losses it sustained from weaker crude oil prices.
Technical Outlook for USDCAD
The pair descended below the 1.30982 support and thus invalidated any chances of forming a triple bottom at that level. The USDCAD is now testing support at 1.30385, site of lows seen yesterday and the 1st week of September. A breakdown of this price level brings 1.29953 into focus, with 1.29241 lining up as further support to the south.
On the flip side, a bounce on the current support allows the USDCAD to target the 1.30982 price level at the first instance. A push towards the channel’s upper border has to breach resistance areas at 1.31501 and 1.32044, before meeting this target at 1.32458. The outcome of the
US election and crude oil prices remain defining fundamentals for this pair heading into next week.