- USDCAD slumps again near weekly low and is under pressure from a combination of factors.
- The rise in the US unemployment rate overshadows the upbeat NFP data and weighs heavily on the dollar.
- Canadian jobs data and recovery in oil prices underpin the Loonie and add to the sell bias.
The pair USDCAD adds to its heavy intraday losses and sinks the weekly low below 1.3550 in reaction to US and Canadian jobs data.
The US dollar maintains its heavily bid tone after the much-followed US NFP report showed 261,000 jobs added in October, well above the 200,000 forecast. Also, the previous month’s reading was revised higher from 263,000 to 315,000. However, this was offset by a slight disappointment in the unemployment rate, which rose to 3.7% during the reported month, against expectations of a rise to 3.6% from 3.5% in September. The mixed data failed to impress US dollar bulls or support the USDCAD pair.
The loonie, on the other hand, gets a strong boost from Canadian employment data, which is mostly upbeat. Statistics Canada reported that the economy added 108,300 jobs in October, beating expectations for a 10,000 increase by a large margin. Other data revealed that the unemployment rate remained at 5.2%, against expectations of a rise to 5.3%. This comes amid an intraday recovery in Crude Oil prices, which is seen as another factor underpinning the Commodity-linked Loonie and contributing to the sharp intraday decline in USDCAD.
Aside from the fundamental factors mentioned, the latest leg down seen over the last hour could also be attributed to some technical selling below 1.3600. Therefore, it remains to be seen whether the drop marks a new bearish breakout or is seen as a buying opportunity amid a more aggressive stance taken by the Federal Reserve. However, the USDCAD pair remains on track to finish in the red for the third week in a row.
Technical levels to watch
Source: Fx Street
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