USD/CAD Falls to Support as Canadian Job Market Improves

Canada gained 58,300 jobs in April, more than three times the early expectations. Also the unemployment rate was a pleasant surprise with a drop to 7.6%. A gain of around 18,000 jobs and an unchanged unemployment rate of 7.7%. were estimated. USD/CAD falls to support.

USD/CAD is now at 0.9610,. It bounced off the 0.96 support line. Before the release, it  traded at 0.9628, falling from around 0.97 seen earlier.

Resistance is found at 0.9667 and 0.98. Support is at 0.96 and 0.9510. For more lines, see the Canadian dollar forecast.

These superb figures are a significant correction from last month’s disappointing figures, that hurt the loonie. A drop of 1500 jobs was reported for March. Drops became quite rare in recent months. Now we have a huge correction.

This is also a good sign for the US economy. Canada exports a lot of oil, but the economy depends on American consumers more than anything else. Canada’s southern neighbor is its biggest trade partner.

The oil factor had a limited impact on the loonie yesterday. The big fall in oil, over 10%, that was triggered by Trichet’s dovish stance, weakened the Canadian dollar, but this was rather limited. USD/CAD didn’t rise like the Aussie fell, or the euro or the pound. The core of Canada’s economy is stronger.

Tension is now mounting towards the US Non-Farm Payrolls. Maybe the Canadian job report implies a better US report, although given the recent figures, it’s very hard to be optimistic about the US.