USD/CAD has started Friday trade with gains. The pair is currently trading at 1.3351, up 0.33% on the day. On the fundamental front, employment numbers will be in focus on both sides of the border, so traders should be prepared for possible volatility from USD/CAD.
Canadian, US job numbers could shake up USD/CAD
We could see some strong movement from USD/CAD in the North American session, with the release of key job numbers in Canada and the United States. The star of the show is US nonfarm payrolls, which is often a market-mover. The forecast for July stands at 1.55 million, a respectable number. However, this is much lower than the previous release of 4.80 million. A possible warning sign is the ADP nonfarm payroll release, which was published earlier this week. The indicator showed that the economy created just 167 thousand jobs, well off the estimate of 1.2 million. Will the official nonfarm payrolls follow suit with a soft reading? Wage growth, another key reading, is projected to come in at -0.5%, which would mark a third straight decline. If either of these releases misses expectations, the US dollar could lose ground.
Investors will also be keeping a close eye on Canadian numbers. Canada created 952.9 thousand jobs in June, a monster figure. The July forecast is much smaller, at 395.0 thousand. Still, if the economy can put together two strong months of job creation, it could signal that the recovery is gaining steam, which could give the Canadian dollar a boost.
The pair posted small gains in the Asian session and has flattened out in European trade.
- USD broke through resistance at 1.3337 in the Asian session. 1.3374 is the next resistance line
- There is support at 1.3258. Below, there is support at 1.3212, which is protecting the 1.32 line
- The 10-day MA has been relevant all week. If USD/CAD can break above this line, it would be a bullish sign for the pair
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