USD/CAD In Rotation After Canadian Jobs Report

The Friday forex session has been an active one featuring a weakening Greenback. Losses against the Euro, British pound, and Swiss franc have highlighted the action. It appears institutional players are taking profits from the recent USD rally off-of-the-board going into the weekend.

As covered in an update from Thursday, several primary Canadian metrics were due out this morning. The numbers were not good:

Event                                                               Projected           Actual

Net Change In Employment (April)                     17.4K                -1.1K

Unemployment Rate (April)                                  5.8%                 5.8%

Although Canadian Unemployment came in on schedule, the net change for April underperformed expectations by 18,500 workers. This number is worth keeping an eye on as we enter the North American Summer months. An increase in oil production is likely to spike this number as early as next month.

USD/CAD Technicals

The USD/CAD has traded in a tight range thus far. While the employment reports were not overly positive, the price of WTI crude oil is helping the Loonie. At press time, June WTI crude is trading at $71.25, off of established session highs in the neighborhood of $71.60.

Here are the technicals to watch for today’s session:

• Resistance(1): Bollinger MP, 1.2812
• Support(1): Daily SMA, 1.2736

Bottom Line: The USD/CAD is in a rotational phase, posting a small 49 pip daily range. This is likely to be extended, as the U.S. crude oil futures session gets underway.

A test of the Daily SMA has proved fruitless, with buyers stepping in just above the 1.2725 handle. For the remainder of the session, I will be selling from beneath the Bollinger MP from 1.2804. With an initial stop at 1.2831, this trade is good for 25+ pips when implementing a 1:1 risk vs reward management plan.   

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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