Home USD/CAD: Trading the Canadian Apr 2015

USD/CAD: Trading the Canadian Apr 2015

Canadian Employment Change is  one of the most important economic indicators. Traders and analysts carefully scrutinize employment figures, and a reading higher than forecast is  bullish for  the loonie.

Here are the details and 5 possible outcomes for USD/CAD.

Update:  Canada gains 28.7K jobs – USD/CAD slides

Published on Friday at 13:30 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. The release of the employment change indicator simultaneously with the unemployment rate is highly anticipated and  is often a  market-mover.

Employment Change has been struggling, posting three declines in the past four readings. The indicator came in at -1.0 thousand in February, better than the forecast of -3.5 thousand. The markets are expecting little movement in the March report, with an estimate of +0.1 thousand. Will the indicator repeat and beat the prediction?

Sentiment and Levels

The Canadian economy remains sluggish, and the loonie posted strong losses last week  even with weak US job numbers.  However, JOLTS  Job Openings  beat expectations, so we could see a rebound from  key employment numbers.  So, the overall sentiment is bullish on USD/CAD towards this release.

Technical levels from top to bottom: 1.2924, 1.2798, 1.2624, 1.2541, 1.2387 and 1.2230.

5 Scenarios

  1. Within expectations: -3.0K thousand to +3.0K: In this scenario, USD/CAD could show some slight fluctuation, but it is likely to remain within range,  without breaking any levels.
  2. Above expectations: 3.1K to 7.0K: A reading above expectations would be an indication  of growth in the Canadian economy,  and could  push the pair  below one  support level.
  3. Well above expectations: Above 7.0K: A sharp rise in  job gains  could propel the pair downwards, and two or more levels of support can be broken.
  4. Below expectations: -6.0K to -3.1K: A lower than expected reading could push USD/CAD upwards, with one resistance level at risk.
  5. Well below expectations: Below -6.1K: A poor reading  could hurt  the loonie, and the  pair could break two  or more resistance levels.

For more on USD/CAD, see the  Canadian dollar forecast

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.