Canadian Employment data beats HUGELY

After the less dovish Bank of Canada meeting on Wednesday in which Tiff Macklem said that the outlook on Q1 GDP will be revised higher, the Canadian employment data helped to provide further evidence of the central bank’s outlook. The Canadian employment change for February was +259,200 vs an expectation of +75,000. For January, the print remained unchanged at -212,800. The Unemployment Rate also dropped from 9.2% to 8.2%! Part-time jobs did outpace fulltime jobs at 171,000 vs 88,200, however no matter how you dissect these numbers, they are stronger than economist anticipated.

Forex market hours: when is the best time of day to trade forex?

USD/CAD has been selling off since the pandemic highs on March 18^th in an orderly descending wedge formation. Interestingly, many of the US Dollar pairs have been moving higher as of late. However, USD/CAD is not one of them. The pair is currently pushing lower towards the bottom trendline of the descending wedge and February 25^th lows.

Soruce: Tradingview, City Index

On a 240-minute timeframe, USD/CAD moved aggressively higher off the lows on February 25th on the heels of a weak 7-year auction. However, price only bounced to the downward sloping trendline dating back to October 29^th, 2020. The resistance held and the pair resumed its move lower. Price broke lower out of a symmetrical triangle on March 11^th and may be resuming the longer-term trend, on its way to testing the February 25^th low at 1.2468, which acts as the first level of support. If price breaks below there, support is at the 127.2% and 161.8% Fibonacci extensions from the February 25^th lows to the February 26^th highs at 1.2380 and 1.2280, respectively. The next level of support isn’t until the September 2017 lows near 1.2061! However, if the US Dollar can strength against the Canadian Dollar, resistance is at the bottom level of the symmetrical triangle near 1.2634 and then the upper, longer term trendline from November 2020 near 1.2680. The next level of resistance is at the February 26^th highs near 1.2748.

Source: Tradingview, City Index

At this point, there is much more resistance, near-term, than support. If the data continues to be strong out of Canada, USD/CAD may be headed lower. In addition, stronger crude oil prices will help support the strong Canadian Dollar, causing USD/CAD to move lower. However, the US data hasn’t been that weak either, especially in terms of inflation expectations, employment data, and the vaccine rollout. These may act as an incentive for the Fed to reduce tapering “earlier than expected”, which would cause the US Dollar to rise, and may bring USD/CAD with it (see: Are 10-year yields driving US Dollar pairs?). Regardless of what the US data shows, this Canadian employment data was strong!

Learn more about forex trading opportunities.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.