Canada’s job market disappointed with a loss of jobs. The Canadian dollar weakens but holds to gains – USD/CAD doesn’t lose an important resistance line. At least not yet. The Non-Farm Payrolls can take it anywhere.
Canadian Employment Change showed a loss of 2,600 jobs. This small job loss isn’t devastating, but it falls short of expectations – a rise of about 20,000 jobs. The Canadian Unemployment Rate met expectations and remained unchanged at 8.5%.
USD/CAD reacted with a leap from 1.0310 to 1.0370. This instant 60 pip jump is the result of disappointment, but it’s important to note that the important resistance line of 1.04 was not broken.
Update: NFP fell by 85K – disappointment. But the Unemployment Rate remained at 10% (didn’t rise) and more importantly – last month’s figure saw a rise of 4,000 – the first in two years. EUR/USD is rising but hesitating.
USD/CAD, as all the forex pairs, are awaiting the upcoming American Non-Farm Payrolls which are currently expected to drop by 3,000 jobs, but could also see gains. This could send the pair anywhere…
At the beginning of the week, USD/CAD confirmed the break under 1.04. Although the move wasn’t strong, this was a very important support line. The pair traded in clear range: 1.04 to 1.0750. This range is described in the Canadian dollar forecast.
During this week, it went lower and found a new and narrow range, roughly between 1.03 and 1.04. Canadian indicators were mixed.
Earlier this week, Canadian RMPI (Raw Materials Price Index) rose by 2.2%, much more than 1.2% that was predicted. This follows the high CPI a few weeks ago. Rising prices in Canada mean that a rate hike can come sooner than expected.
On the other hand, Ivey PMI, which is an important indicator for the Canadian economy, disappointed by dropping to 48.4 points, below 50. This is a sign of economic contraction, according to this indicator.
All eyes are on the NFP. I’ll update this post with USD/CAD developments.
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