USD/CAD – Loonie under pressure as Canada posts job losses

The Canadian dollar is slightly lower at the start of the week. Currently, USD/CAD is trading at 1.3364, down 0.15% on the day. On the release front, Canadian construction numbers were a mix. Housing starts housing starts jumped to 193 thousand, up from 173 thousand a month earlier and matching the forecast. Building Permits plunged 5.7%, well below the estimate of a 2.0% gain. In the U.S., the sole event is factory orders, which is expected to decline by 0.5%. On Tuesday, the U.S. releases JOLTS Jobs Openings.

On Friday, the U.S. and Canada posted key employment numbers. U.S. nonfarm payrolls came in at 196 thousand, easily beating the estimate of 172 thousand in March. Still, this release is significantly lower than the December and January releases, both of which were above the 300-thousand level. Wage growth dipped to 0.1%, shy of the estimate of 0.3%. In Canada, employment declined by 7.2 thousand in March, after a huge increase of 55.9 thousand in February.

The Canadian economy has been affected by the trade war between the U.S. and China, especially the manufacturing and export sectors. With talks between the two super-economies continuing, there is optimism that China and the U.S. will reach a deal, and that could boost the Canadian dollar. There were reports last week that an agreement is 90% complete, with the remaining issues including enforcement mechanisms and the removal of trade tariffs.

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USD/CAD Fundamentals

Friday (April 5)

  • 8:30 US Average Hourly Earnings. Estimate 0.3%
  • 8:30 US Nonfarm Employment Change. Estimate 172K
  • 8:30 US Unemployment Rate. Estimate 3.8%
  • 8:30 Canadian Employment Change. Estimate 3.0K. Actual -7.2K
  • 8:30 Canadian Unemployment Rate. Estimate 5.8%. Actual 5.8%
  • 15:00 US Consumer Credit. Estimate 17.2B

*All release times are DST

*Key events are in bold

USD/CAD for Monday, April 8, 2019

USD/CAD, April 8 at 9:10 EST

Open: 1.3384 High: 1.3387 Low: 1.3358 Close: 1.3358

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3125 1.3200 1.3290 1.3383 1.3445 1.3552

USD/CAD showed little movement in the Asian session and posed slight losses in European trade

  • 1.3290 is providing support
  • 1.3383 was tested earlier in resistance. It is a weak line
  • Current range: 1.3290 to 1.3383

Further levels in both directions:

  • Below: 1.3290, 1.3200 and 1.3125
  • Above: 1.3383, 1.3445, 1.3552 and 1.3662

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.