USD/CAD Spikes To Retest 2-Month Highs After Non-Farm Payrolls

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The USD/CAD currency pair on Friday spiked to retest the current 2-month highs of about 1.2841, following the latest round of the employment data. The currency pair continues to trade within a consolidative triangle formation in the 60-min chart.

The pair plunged to new 3-day lows before rallying back to recoup losses. It remains pinned above the 100-hour moving average. The currency pair has since moved back closer to the overbought conditions of the 14-hour RSI.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in both markets. On Friday, the US non-farm payrolls for November missed the expected job count of 550k with 210k. On the other hand, the unemployment rate edged lower to 4.2% from 4.6% in October, surpassing the consensus expectation of 4.5%, while the average hourly wage growth steadied at 4.8% (YoY) in line with October, missing the expectation of 5%. Earlier in the week, the ISM Manufacturing PMI slightly beat 61 with 61.1, while the initial and continuing claims also outperformed expectations.

In Canada, Net change in employment beat the expectation of 35k with 153.7k, while the unemployment rate dropped to 6% from 6.7% in October, outperforming the market expectation of 6.6%. On the other hand, the participation rate narrowly missed the expectation of 65.4% with 65.3%, while the labour productivity rate for Q3 declined by 1.5% (QoQ) compared to an expected decline of 0.8%.

USD/CAD Technical Analysis (the 60-min Chart)

Technically, the USD/CAD currency pair seems to have recently performed a quick turnaround, bouncing off new 3-day lows to retest the current 2-week highs. As a result, the currency pair has surged closer to the overbought conditions of the 14-hour RSI.

Therefore, the bulls will be looking to extend the current rebounds towards 1.2860 or higher to 12881. On the other hand, the bears will target potential pullbacks at about 1.2818, or lower at 1.2798.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair seems to be trading within an ascending channel formation. This indicates a significant long-term bullish bias in the market sentiment.

Therefore, the bulls will be looking to ride the current bull-run deep into overbought conditions at about 1.2905 or higher to 1.3005. On the other hand, the bears will target potential profits at about 1.2752, or lower at 1.2643.

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