• The number of people employed grew by 67,000 in January; unemployment rate ticks higher to 5.8%.
• A goodish bounce in oil prices and a modest USD retracement prompt aggressive long-unwinding trade.
The USD/CAD pair finally broke down of its Asian session consolidation phase and tumbled below mid-1.3200 in a knee-jerk reaction to the upbeat Canadian jobs report.
Data released this Friday showed that the number of people employed in the Canadian economy grew by 67,000 in January, surpassing even the most optimistic estimates, and largely offset a larger than expected rise in the unemployment rate.
The commodity-linked currency – Loonie got an additional boost from a goodish recovery in crude oil prices, which coupled with a modest US Dollar retracement further collaborated to the pair sharp intraday slide of nearly 100-pips from two-week tops.
Today’s downfall snaps four consecutive days of the winning streak and hence, it would now be interesting to see if the pair is able to find any buying interest at lower levels, or the current pull-back marks the end of this week’s strong corrective bounce from near three-month lows set last Friday.
Technical levels to watch
The 100-day SMA, currently near the 1.3210-05 region now seems to act as immediate support, which if broken might turn the pair vulnerable to aim back towards challenging the very important 200-day SMA support. On the flip side, the 1.3290-1.3300 region now becomes an immediate strong hurdle, above which the pair is likely to aim towards testing January monthly swing highs, around the 1.3375 level.