The Canadian job market made a U-turn: a huge loss of jobs was reported, and the unemployment rate jumped back up to 8.6%. USD/CAD leaped after the release, creating a hole in the chart. Note that the rise began before the official release. Was the data leaked?
Canadian Employment Change showed a fall of 43.3K jobs. A small rise of 10K jobs was expected, so this is a big disappointment. This also erases all the jobs gained last month (30.6K) and more. The Canadian Non-Farm Payrolls are falling again, like the American NFP that will be published soon.
This release suggests that the last month’s rise was something temporary, a spike in the job numbers graph, and not a real change. Unemployment rate also disappointed with a rise to 8.6%, 0.1% less than the yearly high of 8.7% recorded in August.
USD/CAD reacted with a leap that caused a gap in the hourly charts. The rise began before the release. It looks like someone knew that bad news were coming.
USD/CAD rose from 1.0650 to 1.0690 before the release, and then hit 1.0740 right afterwards – a 50 pips gap.
At the time of writing, USD/CAD falls back to 1.0700, still not closing the gap, but calming down before the bigger release: American Non-Farm Payrolls.
On the road north, USD/CAD will meet 1.0870 which was the peak at the beginning of the week. Looking south, 1.0590 is the bottom of the current range.
With Non-Farm Payrolls coming, these lines can be broken easily in any direction. A break might be temporary and related to the crazy market conditions that appear with each NFP release.
Further reading: This week’s USD/CAD Forecast.Get the 5 most predictable currency pairs