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Canadian Jobs Slip in May Weighing on CAD
Canadian Employment Change showed a surprise decline of 7.5k against expectations of a gain of 23.5k. This had primarily been led by full time jobs which fell 31k, while the unemployment rate stood at 5.8%. In an immediate reaction to the report, the Canadian Dollar fell across the board with USDCAD breaching back above 1.30 to touch a high of 1.3040. However, if there was one positive, wage growth accelerated by 3.9% above estimates of 3.2% as such the weakness in the Canadian Dollar was short-lived, with rate expectations for the BoC at the July meeting also relatively unchanged at circa 72%.
USDCAD PRICE CHART: DAILY TIME FRAME (September 2017-May 2018)
USDCAD Technical Levels
Further upside in USDCAD remains curbed by the descending trendline from the 2016-17 peaks acting as firm resistance. Longer term target for USDCAD bulls would be for a test of 1.3124, which represents the 2018 highs. On the downside, support comes in from the 20DMA sitting at 1.2920, alongside buying interest from 1.2880.
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--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
