USD/CAD muted as US jobs numbers mixed

US Employment Data Mixed

All eyes were on US job numbers on Thursday, and the results were a mixed bag. For a second straight month, the nonfarm payrolls release was higher than expected. The gain of 4.8 million jobs easily beat the estimate of 3.03 million. The unemployment rate fell to 11.1 percent, down from 13.3% beforehand. Jobless claims dropped slightly to 1.42 million, higher than the estimate of 1.35 million. The fly in the ointment was wage growth, which declined by 1.2%, missing the forecast of -0.8 percent. The numbers did not cause much of a stir on the currency markets and USD/CAD has shown limited movement in Thursday trade.

Canadian Dollar Continues to Impress

The Canadian dollar posted strong gains in the second quarter, to the surprise of many. After sustaining losses of 4.9% in March, many analysts wrote off the Canadian dollar, with one major bank sending a research note to its clients which said that there was not one reason to purchase Canadian dollars. The currency has defied the naysayers and rebounded in impressive fashion, with USD/CAD falling by 3.5 percent in Q2. The loonie has gained ground this week, despite a June GDP release of -11.6 percent. The Canadian economy may not be in good shape, but investors are clearly concerned about the health of the US economy, which has buckled under the wake of the Covid-19 pandemic. Barring a sudden deterioration in the Canadian economy, the Canadian dollar could continue to make inroads against its US cousin.

US dollar rally ends as risk appetite rises

USD/CAD Fundamentals

Thursday (July 2)

  • 8:30 Canadian Trade Balance. Estimate -3.0B. Actual -0.7B
  • 8:30 US Average Hourly Earnings. Estimate -0.8%. Actual -1.2%
  • 8:30 US Nonfarm Employment Change. Estimate 3037K. Actual 4800K
  • 8:30 US Unemployment Rate. Estimate 12.4%. Actual 
  • 8:30 US Unemployment Claims. Estimate 1350K. Actual 11.1%
  • 9:30 Canadian Manufacturing PMI
  • 10:00 US Factory Orders. Estimate 8.6%
  • 10:30 US Natural Gas Storage. Estimate 77B  

*All release times are EDT

*Key events are in bold

USD/CAD for Thursday, July 2, 2020

USD/CAD, July 3 at 9:20 EDT

Open: 1.3587 High: 1.3611 Low: 1.3575 Close: 1.3598

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3330 13420 1.3550 1.3661 1.3757 1.3900

USD/CAD showed little movement in the Asian session. The pair has posted small gains in the European and North American sessions.

  • 1.3550 is providing immediate support
  • 1.3661 is the next resistance line
  • Current range: 1.3550 to 1.3661

Further levels in both directions:

  • Below: 1.3550, 1.3420 and 1.3330
  • Above: 1.3661, 1.3757 and 1.3900

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.