The USDCAD pair rose as the market reacted to the latest private sector job report by Automatic Data Processor (ADP)
US jobs disappear
According to ADP, the private sector in the United States lost more than 20 million jobs in April. Most of these jobs were lost in large companies that employ more than 500 people. These companies lost more than 8 million jobs. They were followed by small businesses that employ between one and 49 people, which lost more than 6 million jobs. Medium-sized companies lost more than 5.26 million people.
The services sector was the worst affected, having lost more than 16 million people. These were mostly in the hospitality, transport and professional services. On the other hand, goods-producing industries lost more than 4.2 million jobs.
While these numbers were bad, they don’t reflect the full impact of the coronavirus in the United States. This is because the data was collected through April 12. This means that jobs lost in the final two week of the month were not collected.
Therefore, the market will be looking at the jobless claims data that will be released tomorrow and the official government data that will be released on Friday.
Crude oil impacts ignored
The USDCAD rose in a day that the price of crude oil ended a five-day streak. As the fourth-biggest crude oil producer, the price of oil tends to affect the Canadian dollar. The price of Brent and WTI dropped by 3% and 5% respectively as the market grew uncomfortable with the rising inventories.
Data from the American Petroleum Institute (API) showed that inventories in the United States rose by more than 8 million barrels last week. This was higher than the 7.7 million that analysts polled by Reuters were expecting. Later today, the EIA will release the official numbers from the US, which could impact the USD/CAD pair.
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USD/CAD technical outlook
The USD/CAD pair rose to an intraday high of 1.4110. On the hourly chart, this price is slightly above the 61.8% Fibonacci retracement level of 1.4130. This retracement was drawn by connecting the highest level in April with the lowest level yesterday. The price is also above the Ichimoku cloud. Therefore, the pair may continue rising, as bulls attempt to test the previous high of 1.4150.
On the flip side, this thesis will be cancelled if the pair moves below the support level at 1.4000. This price is an important psychological level and also the lowest level on Monday.
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