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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
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
Gold
Bullish
Low
High
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
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • LIVE NOW: Join DailyFX Senior Strategist @IlyaSpivak LIVE as he discusses the outlook for the financial markets in the week ahead! https://www.dailyfx.com/webinars/889679267
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.27%, while traders in Germany 30 are at opposite extremes with 84.48%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Hp25WV8QCx
  • LIVE IN 30 MIN: Join DailyFX Senior Strategist @IlyaSpivak LIVE as he discusses the outlook for the financial markets in the week ahead! https://www.dailyfx.com/webinars/889679267
  • #NOK, #AUD and #SEK are expected to be the most active G10 currencies vs USD with 1-week implied volatility at 7.35, 7.76 and 6.72, respectively
  • Tune in to @IlyaSpivak 's #webinar at 10:00 PM ET/3:00 AM GMT for insight on the cross market weekly outlook. Register here: https://t.co/E213bTtq5C https://t.co/Mh5NxU5BsU
  • RT @KyleR_IG: * PBOC OFFERS 1-YEAR MLF AT 3.15%, LOWERED FROM 3.25% PREVIOUSLY #ausbiz $cny
  • 🇨🇳 CNY New Home Prices (MoM) (JAN), Actual: 0.27% Expected: N/A Previous: 0.35% https://www.dailyfx.com/economic-calendar#2020-02-17
  • 🇨🇳 CNY New Home Prices (MoM) (JAN), Actual: 0.27% Expected: N/A Previous: 0.4% https://www.dailyfx.com/economic-calendar#2020-02-17
  • How Crude Oil Prices React to Weather-Induced Disruption Fears- https://www.dailyfx.com/forex/fundamental/article/special_report/2019/09/11/How-Crude-Oil-Prices-React-to-Weather-Induced-Disruption-Fears.html
  • RT @FactSet: $SPX is reporting revenue growth of 3.6% for Q4, led by the Health Care (12%) and Communication Services (9%) sectors. https:/…
Canadian Dollar Outlook: USD/CAD Turns to Canada Jobs Data

Canadian Dollar Outlook: USD/CAD Turns to Canada Jobs Data

2019-08-08 18:41:00
Rich Dvorak, Junior Analyst
Share:

CANADIAN DOLLAR, JULY CANADA JOBS REPORT & LABOUR FORCE SURVEY

  • USDCAD upward momentum is beginning to show signs of waning headed into the July Canada jobs report due Friday at 12:30 GMT
  • Canadian Dollar overnight implied volatility measures jump as currency traders prepare for high-impact event risk surrounding Canada’s change in employment data release
  • Sharpen your forex trading skills with this free educational guide covering the Traits of Successful Traders

As uncertainty rises, typically so does implied volatility. Canadian Dollar currency pairs are reflecting this phenomenon which is to be expected around closely watched economic data releases that tend to move markets – like tomorrow’s labour force survey. In fact, overnight implied volatility measures for USDCAD, EURCAD, CADJPY, AUDCAD and GBPCAD are all well above their 12-month averages headed into the July Canada jobs report.

CANADIAN DOLLAR IMPLIED CURRENCY VOLATILITY & TRADING RANGES – USDCAD, EURCAD, CADJPY, AUDCAD, GBPCAD

Canadian Dollar Implied

Canadian Dollar currency traders are likely placing heavy weight on the headline change in employment figure seeing that it will provide the latest anecdote for the Bank of Canada (BOC) to consider when communicating its next monetary policy update. BOC Senior Deputy Governor Wilkins most recently communicated how the central bank is “paying particular attention to Canadian household spending and the oil sector. Consumption has rebounded and should continue to be supported by a solid labour market.

That said, another robust Canadian jobs report could reinforce the relatively hawkish posturing of the BOC whereas a worse-than-expected data print may send the loonie tumbling – particularly if markets reassess BOC rate cut bets higher.

FOREX ECONOMIC CALENDAR – CAD

Forex Canadian Dollar Economic Data Calendar Chart

Learn more about Forex News Trading

While the net change in employment will likely take the spotlight, there are several other economic indicators that have potential to weigh in on the market’s reaction in addition to the underlying components of the labour force survey which should not be overlooked.

CANADA CHANGE IN EMPLOYMENT – MONTHLY CHART

Canada Change in Employment Historical Monthly Chart

It was stated in the June Canada jobs report that “employment gains have been relatively broad-based across sectors and regions,” adding that job additions were “particularly strong in service industries and outside oil-producing regions.” Also noteworthy is how the prior 2 employment change readings have drifted lower from the blockbuster report in April. Although, net job additions will look to continue its overarching trend higher.

BANK OF CANADA INTEREST RATE CHANGE PROBABILITIES

Bank of Canada Interest Rate Change Probability Chart

According to overnight swaps, rate traders are currently pricing in a 59.3% probability that the Bank of Canada cuts its policy interest rate by the end of the year. This is down slightly from yesterday’s reading of 66.9% but higher than the low on July 31 low of a 24.7% probability of a rate cut priced in.

USDCAD PRICE CHART: DAILY TIME FRAME (MAY 26, 2019 TO AUGUST 08, 2019)

Spot USDCAD price chart technical analysis

Judging by USDCAD overnight implied volatility of 8.23%, spot prices are estimated to trade between 1.3181-1.3295 with a 68% statistical probability. The 1.33 handle, which aligns closely with the upper bound of the 1-standard deviation trading range and the midpoint of spot USDCAD’s leg lower from the end of May to mid-July, could serve as a strong area of technical resistance if the July Canada jobs report disappoints. On the other hand, USDCAD bears will have to push below technical support posed by the 38.2% Fibonacci retracement if the data print is strong before targeting the month-to-date low and lower bound of the options implied trading range around the 1.32 handle.

FOREX TRADING RESOURCES

  • Download the Q3 DailyFX Forecasts for comprehensive fundamental and technical analysis on major currencies like the US Dollar and Euro in addition to equities, gold and oil
  • Sign up for Live Webinar Coverage of the financial markets hosted by DailyFX analysts where you can have all your trading questions answered in real-time
  • Find out how IG Client Sentiment data can be used to identify potential forex trading opportunities

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES

News & Analysis at your fingertips.