Technical Analysis of USDCAD Following Employment Data
The USDCAD currency pair experienced a downward movement after the release of stronger-than-expected employment data from Canada. The report indicated a significant increase in job growth, with total employment rising by 83.1K, surpassing the expected figure of 0.0K and the previous month's gain of 8.8K. This growth was primarily driven by a surge in part-time employment, which increased by 69.5K, while full-time jobs saw a modest rise of 13.5K.
Key Employment Data Highlights
- Unemployment rate decreased to 6.9% from 7.0%, better than the expected 7.1%.
- Participation rate increased slightly to 65.4% from 65.3%.
- Average hourly wage growth slowed to 3.2% year-over-year, down from 3.5%.
Market Reaction
In response to the employment data, the USDCAD pair initially fell from 1.3686 to a session low of 1.3651, just below the earlier low of 1.3652 observed during the Asian session. However, buying interest emerged near this support level, leading to a rebound.
Technical Levels to Watch
The pair rebounded to a high of 1.3673, approaching the rising 100-hour moving average, currently at 1.3675. A sustained move above this key moving average would indicate a setback for sellers and could signal a potential reversal in momentum.
Conversely, if the price remains below the 100-hour moving average, sellers may target the session low and the rising 200-hour moving average, which is positioned at 1.36424.
Conclusion
The USDCAD's reaction to the employment data highlights the importance of key technical levels in determining market direction. Traders should closely monitor the 100-hour and 200-hour moving averages for potential trading signals in the coming sessions.