USDCAD Overnight Range 1.3235-1.3360
Canada lost a mere 2,300 jobs in February and the Canadian dollar lost nearly ½ a cent in a heartbeat. USDCAD declined steadily throughout the Asia and European sessions and started the New York day at the overnight low. Pre-employment report positions gave USDCAD a bit of a bid and then it soared when the employment report failed to deliver the expected 9,000 job gains. Rubbing salt into the wound was a jump in the unemployment rate to 7.3% from 7.2%.
However, despite the fact that it is a weak report and that there hadn’t been two consecutive months of lost jobs and rising unemployment since 2009, it shouldn’t have surprised anyone. Rising unemployment is one of the reasons that the Liberals will be spending $10+ billion on infrastructure. FX traders concluded the same thing and within the hour, USDCAD was back near the overnight lows.
The other FX markets have calmed down following yesterday’s rock and roll coaster ride that started with the ECB. In Asia, EURUSD attempted to extend EURUSD above 1.1200 but the move stalled and the single currency slid has been sliding lower, ever since. Trader’s are still trying to determine what’s in store for EURUSD in the weeks and months ahead, torn between the new ECB stimulus program and Mario’s statement that “interest rates aren’t going any lower”.
USDJPY probed support in the 112.75 area and then turned tail and rallied to 113.90. Soft UK trade data was ignored by GBPUSD traders.
Global equity indices have recovered from the ECB inspired turbulence and are back in the green and US futures are pointing to gains at the open.
FX markets are likely to consolidate within the recent ranges with four central bank meeting’s on tap for next week, including Wednesday’s FOMC meeting.
USDCAD technical outlook
The USDCAD downtrend remains intact while trading below 1.3370 targeting a break below 1.3220 to extend losses to 1.3150, initially with a test of 1.3000 waiting in the wings. Longer term, a sustained breach of 1.3270 on a daily chart, targets 1.2950, which represents the 61.8% Fibonacci retracement of the May 2015-January 2016 range. For today, USDCAD support is at 1.3220 and 1.3170. Resistance is at 1.305 and 1.3360
Chart USDCAD Daily