USD/CAD Rallies After Weak Jobs Data From Canada

Canadian Dollar Is Under Pressure

USD/CAD is currently trying to settle above the resistance at 1.2760 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 95.40 and is heading towards the next resistance level which is located near the 50 EMA at 95.75. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.

Today, foreign exchange market traders focused on job market data from U.S. and Canada.

In the U.S., Non Farm Payrolls report indicated that U.S. economy added 510,000 jobs in January compared to analyst consensus of 150,000. Meanwhile, Unemployment Rate increased from 3.9% in December to 4% in January.

In Canada, Employment Change report showed that the economy lost 200,100 jobs in January while analysts expected that it would lose 117,500 jobs. Participation Rate declined from 65.4% in December to 65% in January, while Unemployment Rate increased from 6% to 6.5%.

The weak reports put significant pressure on the Canadian dollar, which lost ground against U.S. dollar despite the rally in the oil markets. WTI oil managed to settle above the $92 level and is trying to get above the $93 level. A move above this level will push WTI oil closer to the $95 level which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is trying to stay above the resistance level at 1.2760. In case this attempt is successful, it will get to another test of the next resistance level at 1.2780.

If USD to CAD manages to settle above 1.2780, it will head towards the resistance level at 1.2800. A move above this level will push USD to CAD towards the resistance which is located at 1.2830.

On the support side, the previous resistance at 1.2730 will serve as the first support level for USD to CAD. In case USD to CAD declines below this level, it will move towards the next support level at 1.2710. A successful test of this level will push USD to CAD towards the support at 1.2680.

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