Canada gained 22,000 jobs in December, exceeding expectations for a rise of 19,000. The unemployment rate also posted a positive surprise – it remained at 7.6%, better than expected. A rise to 7.7% was expected. USD/CAD drops and meets support.
USD/CAD now trades at 0.9940, after dropping from 0.9965. The pair already began descending before the release. Strong support is found at 0.9930, which was the 2010 low.
Earlier this week, the Canadian dollar already breached the 2010 low. It enjoyed the high oil prices at the beginning of the week, and more importantly, the improvement in the US economy.
USD/CAD broke below 0.9930 and went as low as 0.9888 before moving upwards. The levels to watch out for are 0.98, 0.9930 (still important in both directions), the obvious parity and 1.0040, which is a minor line.
While oil prices retreated later in the week, the US economy showed significant improvement – ADP Non-Farm Payrolls were outstanding, and also other indicators such as factory orders, and ISM Non-Manufacturing PMI exceeded expectations. A small disappointment came from the weekly jobless claims, but the moving average was still great.
In Canada, data was mixed, while the RMPI (Raw Materials Price Index) rose by 3.5%, more than expected, the highly regarded Ivey PMI fell to 50 points, the borderline between expansion and contraction.
The US Non-Farm Payrolls, the monthly circus which rocks the markets, is due soon. There are high expectations from the US Non-Farm Payrolls.Get the 5 most predictable currency pairs