- Canadian employment report disappoints on Friday.
- Wage inflation rises more than expected in the U.S.
- WTI stays in the red ahead of Baker Hughes report.
The USD/CAD pair spiked to a daily high at 1.3182 in the early NA session following the dismal employment figures from Canada and the upbeat NFP report from the United States. However, the pair retraced its gains to 1.3130 in the next hour before moving back into the positive territory. At the moment, the pair is up 0.18% on the day at 1.3167.
The monthly report published by Statistics Canada revealed that employment fell by 52,000 in August. On a positive note, however, further details of the publication showed that part-time employment declined by 92,000 while full-time employment edged up for the month. Nevertheless, the loonie came under pressure and recorded modest losses against its rivals.
On the other hand, the total nonfarm employment increased by 201K in the U.S. More importantly, the wage inflation, which has been a main point of interest for the Fed, rose 0.4% and 2.9% on a monthly and yearly basis respectively. The initial market reaction lifted the US Dollar Index to a fresh daily high at 95.35 and the index was last seen a little below that level, where it was up 0.3% on the day.
In the meantime, falling crude oil prices put some extra weight on commodity-sensitive loonie’s shoulders on Friday. At the moment, the barrel of WTI is down 0.45% on the day at $67.34.
Technical outlook
1.3200/05 (psychological level/Sep. 4 high) could be seen as the initial resistance for the pair ahead of 1.3290 (Jul. 19 high) and 1.3385 (Jun. 27 high). On the downside, supports align at 1.3110 (daily low), 1.3080 (50-DMA) and 1.3000 (psychological level).
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