USD/CAD Moves Lower As Canada’s Job Reports Exceed Analyst Expectations

Key Insights

• Canada’s Unemployment Rate declines from 6.5% to 5.5%. 
• Meanwhile, U.S. Consumer Confidence continues to move lower. 
• A move below the 50 EMA will push USD/CAD towards the support level at 1.2680.

U.S. Dollar Is Losing Some Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at the 50 EMA at 1.2720, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the resistance at 98.70 and is testing the next resistance level at 99. If this test is successful, the U.S. Dollar index will move towards the resistance at 99.20, which will be bullish for USD/CAD.

Today, Canada released Employment Change report for February. The report indicated that the Canadian economy added 336,600 jobs compared to analyst consensus of 160,000. Unemployment Rate declined from 6.5% in January to 5.5% in February, while analysts expected that it would decrease to 6.2%.

Foreign exchange market traders also had a chance to take a look at the preliminary Michigan Consumer Sentiment report from the U.S. The report showed that Consumer Sentiment declined from 62.8 in February to 59.7 in March, compared to analyst consensus of 61.4.

Technical Analysis

USD to CAD is testing the support level at the 20 EMA at 1.2720. In case this test is successful, USD to CAD will move towards the support at 1.2680.

A move below the support at 1.2680 will open the way to the test of the support at 1.2650. If USD to CAD manages to settle below this level, it will continue its downside move and head towards the next support at 1.2625.

On the upside, the previous support level at the 20 EMA at 1.2745 will serve as the first resistance level for USD to CAD.

In case USD to CAD manages to settle back above this level, it will head towards the next resistance level at 1.2760. A successful test of the resistance at 1.2760 will push USD to CAD towards the resistance at 1.2780.

For a look at all of today’s economic events, check out our economic calendar.