HomeContributorsFundamental AnalysisCanada, US Job Numbers In Spotlight

Canada, US Job Numbers In Spotlight

The Canadian dollar has looked razor-sharp this week, posting gains of 1.93 per cent. Ahead of the North American session, USD/CAD is trading at 1.3061, up 0.12% on the day. Will the loonie’s impressive rally continue on Friday? Investors and traders should be prepared for some volatility from the currency, with both Canada and the US releasing key employment numbers later on Friday (13:30 GMT).

US election drama boosts Canadian dollar

It has been a week to forget for the US dollar, which has fared badly against the G-10 currencies. The election in the US has been the catalyst for exceptional volatility in the currency markets, with the US dollar the big loser. On Tuesday, which was Election Day, the markets were busy buying what the pollsters were selling, which was expectations of a blue tidal wave. In this scenario, the Democrats were projected to sweep the presidency, the Senate and the House of Representatives. This led to a buy-everything frenzy, which boosted the Canadian dollar and other commodity-based currencies.

However, the pollsters are busy wiping egg off of their faces, as the blue wave failed to materialize. At the time of writing on Friday, a winner has yet to be declared in the presidential race, although Joe Biden is inching ever closer to the required 270 electoral ballots to becoming president. There is also a very tight race in both houses of Congress. This abrupt change in events triggered sharp volatility on Wednesday, with the Canadian dollar ending the day unchanged. The likelihood of a Biden presidency has led to a resumed selloff of the US dollar, enabling the Canadian currency to resume its rally on Thursday.

Will employment numbers impact on USD/CAD?

Turning to economic news, investors will be keeping a close eye on job data on both sides of the border (13:30 GMT). In Canada, investors are bracing for a weak figure from Employment Change, with a forecast of just 59.0 thousand. The unemployment rate is expected to remain at 9.0%. In the US, nonfarm payrolls are expected to dip to 595 thousand, which would mark a fourth straight drop. Wage growth is expected to edge up from 0.1% to 0.2%, while the unemployment rate is projected to fall from 7.9% to 7.7%. Unexpected readings could trigger movement from USD/CAD in the North American session.

USD/CAD Technical

  • There is resistance at 1.3144, followed by resistance at 1.3236
  • 1.2994 is the first line of support. This is followed by support at 1.2936
  • USD/CAD crossed below the 50-day MA early in the week, and the pair has continued to move lower
MarketPulse
MarketPulsehttps://www.marketpulse.com/
MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading