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

The Canadian dollar has ticked higher in the Friday session. Currently, the pair is trading at 1.2609, up 0.05% on the day. On the release front, the focus is on Canadian employment indicators, with the release of Employment Change and the unemployment rate. Traders should be prepared for some movement from the Canadian dollar in the North American session.

This week’s market selloff has boosted the US dollar, at the expense of the Canadian dollar and most other major currencies. The Canadian dollar has dropped 1.4% this week, and is down 2.5% in February, erasing the gains we saw in January. Interestingly, the catalyst for the current turbulence has been solid economic data in the US, namely, improved payrolls and wage growth reports. This has raised concerns of inflation, which could lead to a quicker pace of rate hikes from the Federal Reserve. This sentiment has sent the bond markets higher, while weighing on global stock markets.

After some spectacular readings, Canada’s economy is expected to show more modest job creation in January, with an estimate of 10.3 thousand. The unemployment rate is forecast to edge up from 5.7% to 5.8%. If these predictions are within expectations, the Canadian dollar could gain some ground on Friday, and end a tough week on a positive note.

 

USD/CAD Fundamentals

Friday (February 9)

  • 8:30 Canadian Employment Change. Estimate 10.3K
  • 8:30 Canadian Unemployment Rate. Estimate 5.8%
  • 10:00 US Final Wholesale Inventories. Estimate 0.2%

*All release times are GMT

*Key events are in bold

 

USD/CAD for Friday, February 9, 2018

USD/CAD, February 9 at 7:15 EDT

Open: 1.2603 High: 1.2616 Low: 1.2585 Close: 1.2607

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2190 1.2351 1.2494 1.2630 1.2757 1.2855

USD/CAD has showed little movement in the Asian and European sessions

  • 1.2494 is providing support
  • 1.2630 is a weak resistance line
  • Current range: 1.2494 to 1.2630

Further levels in both directions:

  • Below: 1.2494, 1.2351, 1.2190 and 1.2060
  • Above: 1.2630, 1.2757 and 1.2855

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Friday session. Currently, long positions have a majority (53%), indicative of trader bias towards USD/CAD continuing to move upwards.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.