USD/CAD at the Crossroads of the 200-Day SMA Ahead of the Canadian Employment Report
Employment in Canada is expected to jump 20.0K for the month of June after climbing 24.7K in May to mark the sixth consecutive month that the labor market has improved. Market participants are sure to keep a close eye on the breakdown of the report, specifically the change in full and part time employment. Last month, most of the gains were made in private businesses and regular employment. Thus, a reading in full time workers and the participation rate may revive interest rate speculation. As of late, about three quarters of the number of jobs lost during the recession have been recovered. Meanwhile, the job market is expected to continue its northern journey throughout the second half of the year as business spending continues to expand. In turn, this may lead companies to become less reluctant to add onto their payrolls as they become more optimistic of future growth conditions. All in all, the labor market in Canada is relatively strong and is destine to continue its course. However, disappointing figures or an unexpected decline will validate our bullish USD/CAD technical outlook.
USDCAD: After testing the 38.2 percent Fibonacci retracement on the 5/25, 6/21 downswing, price action looks to have rebounded sharply off of this level. This level is relatively important in that it coincides with the 200 day moving average. At the same time, the 50 day SMA looks poised to crossover above the 200 day SMA, which in indicative of additional gains. It is noteworthy that our speculative sentiment index signals for declines at a slow pace, however, traders should not rule out the ratio flipping as retail short positions may soon exceed long positions.
For More Technical Analysis Visit the DailyFX Technical Page
Written by Michael Wright, Daily FX Research
To Receive Future Articles by Email, please contact me at firstname.lastname@example.org
Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.