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USDCAD Trades Up on Softer than Expected Canadian Labour Market Report

In the minutes following the release of the latest US and Canadian labor market report, the USDCAD was up by 27 pips from the time that the news broke.

The expectations on the Canadian labor market report was for the economy to have produced 10K new jobs, and for the unemployment rate to have increased to 5.5% from 5.4%. Instead, the number of new jobs created was -2k; however, the unemployment rate met expectations.

The US economy produced 224,000 new jobs and thereby beat expectations of 160,000 new jobs created per a Bloomberg news poll. The prior figure of 75K was revised to 72k.

Thirty minutes following the release of the labour market reports,  the USDCAD had gained 45 pips from the low of the bottom of the hour but the price had spiked higher by about 76.9 pips before falling back.

It is not all surprising that the price is having a hard time to turn bullish as the USDCAD has been declining over the last few weeks. Realistically the price needs to take out the July 1 high to make more damage to the bears, and have an improved chance of turning higher.  On a break to the July 1 high of 1.3146 the price will have stopped to create lower highs, and traders might target the next high at the June 21 high at 1.3231. However, as long as the July 1 high holds the price will remain bearish and the USDCAD might revisit this week’s low. However, despite the bearish trend, I think it is fair to assume that traders will be careful given the combination of soft Canadian data and strong US data, and wait until Monday before adding to their bearish exposure, alternatively they will wait for a break to the July low at 1.3031.Don’t miss a beat! Follow us on Twitter.