USD/CAD – Canadian Dollar in Holding Pattern Ahead of Job Numbers

By:

Updated: Dec 6, 2019, 12:45 UTC

The Canadian dollar is flat on Friday, but that could change in the North American session. Canada and the U.S. will both release key employment numbers at 15.:30 GMT.

Technical Outlook For USD/CAD, EUR/CAD, GBP/CAD & NZD/CAD: 05.09.2018 With the five-week old descending trend-line restricting the NZDCAD's immediate rise around 0.8660, the pair is likely to revisit the 0.8615 and the 0.8600-0.8595 support-region. Though, refrain to respect the 0.8595 can drag the quote to 0.8560 and then to the 61.8% FE level of 0.8495. Alternatively, a clear break of 0.8660 could escalate the pair's recovery towards 0.8685 and the 0.8740 levels ahead of highlighting the 0.8775 and the 0.8825-30. If the pair continue trading north-wards after 0.8830 then the 0.8875 and the 0.8920 might become traders' favorites.

The Canadian dollar is unchanged in Friday trade. Currently, USD/CAD is trading at 1.3176, down 0.01% on the day.

Ahead – Canadian, US Employment Reports

Traders should be prepared for some volatility from the Canadian dollar in the North American session, as Canada and the U.S. both release key job numbers. After a rare decline in employment change, the economy is expected to show a gain of 10.0 thousand jobs in November. The unemployment rate is expected to remain pegged at 5.5 percent. Over in the U.S., investors are expecting strong numbers. Nonfarm payrolls are projected to increase sharply to 181 thousand in November, compared to 128 thousand in the previous release. As well, wage growth is expected to rise from 0.2% to 0.3%.

Higher Oil Prices Boost Canadian Dollar

Higher oil prices have boosted the Canadian dollar this week. Crude jumped 3.6% on Wednesday, after an unexpectedly strong drawdown in crude inventories. As well, OPEC members have gathered for a crucial meeting, and there is speculation that the cartel may cut production in order to reduce a glut of oil on world markets. West Texas Intermediate has climbed 7.1% since November 1, and a reduction in output by OPEC would likely push WTI above $60 a barrel.

Technical Analysis

USD/CAD has broken below support at the 1.3200 line. Below, we find support at 1.3125, which last saw action in the first week of November. On the upside, 1.3200 has switched to resistance and is a weak line. The 50-EMA and 200-EMA follow, with the 50-EMA at 1.3236 and the 200-EMA is at 1.3239. If the 50-EMA crosses above the 200-EMA, it would be a bullish sign for the pair (“golden cross”).

EUR/GBP

EUR/GBP is trading sideways in the Friday session. Currently, the pair is trading at 0.8445, up 0.08% on the day. The pair shrugged off a weak German manufacturing report. German Industrial Production declined by 1.7% in September, marking a second straight decline. Analysts had expected a small gain of 0.1%.

Technical Analysis

EUR/GBP is within striking distance of support at 0.8400. This major level has held since May 2017, so a breakout below this line would be a major development. On the upside, there is resistance at 0.8500.

About the Author

Kenny Fisherauthor

Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.