Excellent Canadian job figures send USD/CAD down just before the pair was about to breach an important resistance line, while other currencies bow before the greenback.
With an unemployment rate of 8.3%, the US can envy Canada. This exceeded early expectations for a steady 8.5% rate. The Employment Change number is also superb: 43,000 jobs were gained in Canada, almost three times the early predictions for a gain of 15,200 jobs.
Earlier in the week, USD/CAD traded above 1.0530, the minor support line inside the 1.04-1.0750 range. During most of the week it traded far enough from 1.0750. After the dollar’s storm, the 1.0750 was breached, with USD/CAD reaching 1.0780. This break wasn’t confirmed before the release of the job figures – USD/CAD fell back to 1.0750. Instantly after the release, USD/CAD fell from 1.0750 to 1.0720. Although this isn’t a big drop, this saves the pair from jumping above the important resistance line of 1.0750.
If this holds, the next line of support is at 1.0530, followed by the important 1.04 line. If American job numbers follow the American ones, and Non-Farm Payrolls are excellent as well, the 1.0750 barrier could be breached. The next resistance line appears at 1.0850, the last peak before USD/CAD fell into the 1.04 to 1.0750 range.
Other Canadian figures were slightly disappointing this week: Building Permits rose by 2.4%, a little below the 2.7% rise that was predicted, but last month’s number was revised to the upside. Ivey PMI, and important gauge of the economy, rose to 50.8, short of early expectations for a rise to 52.3 points, but above the important 50 points mark – meaning expansion.
For more about the loonie, read the USD/CAD forecast.
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