Canadian Employment Change is one of the most important economic indicators. Traders and analysts carefully scrutinize employment figures, and a reading higher than forecast is bullish for the loonie.
Here are the details and 5 possible outcomes for USD/CAD.
Update: Canada gains 28.7K jobs – USD/CAD slides
Published on Friday at 13:30 GMT.
Indicator Background
Job creation is one of the most important leading indicators of overall economic activity. The release of the employment change indicator simultaneously with the unemployment rate is highly anticipated and is often a market-mover.
Employment Change has been struggling, posting three declines in the past four readings. The indicator came in at -1.0 thousand in February, better than the forecast of -3.5 thousand. The markets are expecting little movement in the March report, with an estimate of +0.1 thousand. Will the indicator repeat and beat the prediction?
Sentiment and Levels
The Canadian economy remains sluggish, and the loonie posted strong losses last week even with weak US job numbers. However, JOLTS Job Openings beat expectations, so we could see a rebound from key employment numbers. So, the overall sentiment is bullish on USD/CAD towards this release.
Technical levels from top to bottom: 1.2924, 1.2798, 1.2624, 1.2541, 1.2387 and 1.2230.
5 Scenarios
- Within expectations: -3.0K thousand to +3.0K: In this scenario, USD/CAD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 3.1K to 7.0K: A reading above expectations would be an indication of growth in the Canadian economy, and could push the pair below one support level.
- Well above expectations: Above 7.0K: A sharp rise in job gains could propel the pair downwards, and two or more levels of support can be broken.
- Below expectations: -6.0K to -3.1K: A lower than expected reading could push USD/CAD upwards, with one resistance level at risk.
- Well below expectations: Below -6.1K: A poor reading could hurt the loonie, and the pair could break two or more resistance levels.
For more on USD/CAD, see the Canadian dollar forecast
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