Terrible Canadian jobs report gives a hard time to CAD

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If the Canadian dollar was looking up to the jobs report to recover, it got a bitter disappointment. The only good detail was that the unemployment rate fell to 7%. However, the details are not looking good.

USD/CAD jumped from support around 1.0910 to 1.0975 and it basically refuses to fall.

Like its southern neighbor, Canada is seeing a drop in the unemployment rate only thanks to a drop in the participation rate. The latter fell below 66% to 65.9%, and is the sole reason behind the fall.

Why? Because Canada gained only 200 jobs in the month of July,1% of the 20K expected. Looking at the details, there was a significant change in the type of jobs: 60K part time jobs were gained and nearly the same number of jobs was lost. This is totally different from June’s silver lining.

USD/CAD already reached a higher level earlier in the week: 1.0985. So, loonie bulls could be encouraged by the current failure to conquer 1.10 or even climb above the previous high.

However, job reports usually echo in markets for a long time, making this a longer term weight on the C$. The Bank of Canada’s neutral bias could turn bearish.

For more, see the Canadian dollar forecast.

This is how the jump of USD/CAD looks on the chart:

Canadian dollar down after jobs August 8 2014 technical chart

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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