Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
USD/CAD Rates to Watch Following Canada Employment Report

USD/CAD Rates to Watch Following Canada Employment Report

David Song, Strategist

Canadian Dollar Talking Points

USD/CAD showed a limited reaction to a larger-than-expected decline in Canada Employment, and key market trends may continue to influence the exchange rate as the US Dollar still reflects an inverse relationship with investor confidence.


USD/CAD Rates to Watch Following Canada Employment Report

USD/CAD appears to be stuck in a narrow range after taking out the 2020 low (1.2688) earlier this week, and swings in risk appetite may sway the exchange rate ahead of the next Bank of Canada (BoC) meeting on January 20 as the central bank plans to carry out its quantitative easing (QE) program “at its current pace of at least $4 billion per week.”

Image of DailyFX economic calendar for Canada

It remains to be seen if the fresh data prints coming out of Canada will influence the monetary policy outlook as the employment report shows a 62.6K contraction in December versus forecasts for a 27.5K decline, but the BoC may continue to endorse a dovish forward guidance at its first meeting for 2021 as Governor Tiff Macklem and Co. “remain committed to providing the monetary policy stimulus needed to support the recovery and achieve the inflation objective.”

Until then, key market themes may continue to influence USD/CAD as the BoC acknowledges that “a broad-based decline in the US exchange rate has contributed to a further appreciation of the Canadian dollar,” and the tilt in retail sentiment also looks poised to persist as traders have been net-long the pair since May 2020.

Image of IG Client Sentiment for USD/CAD

The IG Client Sentiment report shows 68.91% of traders are still net-long USD/CAD, with the ratio of traders long to short standing at 2.22 to 1. The number of traders net-long is 5.56% higher than yesterday and 18.40% higher from last week, while the number of traders net-short is 7.46% higher than yesterday and 33.33% higher from last week.

The rise in net-short interest comes as the rebound from the weekly low (1.2630) appears to have stalled ahead of the weekend, while the rise in net-long interest has fueled the crowding behavior in USD/CAD as 61.74% of traders were net-long the pair earlier this week.

With that said, USD/CAD may continue to consolidate ahead of the next BoC meeting as it appears to be stuck in a narrow range, but swings in risk appetite sway the exchange rate as the US Dollar still broadly reflects an inverse relationship with investor confidence.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by David Song
Learn More About the IG Client Sentiment Report
Get My Guide

USD/CAD Rate Daily Chart

Image of USD/CAD rate daily chart

Source: Trading View

  • Keep in mind, USD/CAD cleared the January low (1.2957) following the US election, with the exchange rate trading to fresh yearly lows in November and December as the Relative Strength Index (RSI) established a downward trend.
  • USD/CAD started off 2021 by taking out last year’s low (1.2688) even though the RSI has broke out of the bearish formation, with lack of momentum to hold above the 1.2770 (38.2% expansion) region pushing the exchange rate towards the 1.2620 (50% retracement) area.
  • However, the failed attempt to test the 1.2620 (50% retracement) area may lead to a near-term correction in USD/CAD as the RSI appears to be reversing ahead of oversold territory, with a break/close above 1.2770 (38.2% expansion) bringing the 1.2830 (38.2% retracement) region back on the radar.
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.