USD/CAD drops to 10-day lows below 1.34 on upbeat Canadian employment data

• The unemployment rate in Canada ticks down to 5.7% in April.
• The core CPI in April rises less than expected in the U.S.
• US Dollar Index extends slide to fresh multi-week lows.

The USD/CAD pair came under heavy bearish pressure in the last hour as the loonie gathered strength on the back of upbeat employment figures from Canada. At the moment, the pair, which touched a 10-day low of 1.3396, is trading at 1.3399, losing 0.57% on a daily basis.  With this recent fall, the pair now looks to close the second straight week in the negative territory.

According to Statistics Canada, employment rose by 107,000 in April to beat the market expectation for a growth of 10,000 and brought the unemployment rate down to 5.7% from 5.8% in March. Additionally, the participation rate rose to 65.9% in the same period.

On the other hand, the U.S. Bureau of Labor Statistics reported that the core Consumer Price Index (CPI) in April rose 0.3% on a monthly basis to fall short of the market expectation of 0.4% and weighed on the greenback. Although the annual core CPI came in at 2.1% to match analysts’ estimate, the US Dollar Index lost its traction and slumped to its lowest level in more than two weeks. At the moment, the DXY is losing 0.23% on the day at 97.20.  

There won’t be any other macroeconomic data release in the remainder of the day and the pair could have a difficult time staging a meaningful recovery.

Technical levels to consider