The USDCAD moved sharply lower on Friday after stronger jobs report. Recall,
- Unemployment rate 6.5% vs 7.0% expected
- Participation rate 65.1% vs 65.3% prior
- Full time -9.4% vs -18.5K prior
- Part time +63.0K vs 85.1K prior
- Average hourly wages for permanent employees 4.00% vs 4.00% prior
As a reminder, there were a pair of weak reports in July/August followed by a pair of strong ones in Sept/Oct, leaving everyone guessing what the real trajectory of hiring in Canada is. This report provides an emphatic answer. It’s another big jobs gain and a tumble in the unemployment rate. The fall in joblessness is flattered by declining participation but it still runs in the opposite direction of what markets were expecting.
The Bank of Canada had already indicated a shift to the sidelines but now it might be time to start talking about when it’s time to hike rates.
Technically, the price fell below both the 100 day moving average at 1.3901 and the 200 day moving average at 1.38863 on Friday. That shift is significant. The price also moved below the 50% midpoint of the move up from the meat June low to the November high. That level comes in at 1.3839 and is the close risk level now for sellers looking for more downside.
On the downside, the 61.8% retracement and swing level level going back to mid September both come in at 1.3768. That is the next key target. The price is currently trading between the 50% and the 61.8% retracement levels near the 1.3800.
In the video, I look at the technicals and explain the key levels in play
