1. Home
  2. /News
  3. /USD/CAD Retreating From the 200 SMA, After the Decline in Canadian Unemployment Rate

USD/CAD Retreating From the 200 SMA, After the Decline in Canadian Unemployment Rate

USD/CAD has been bullish for more than a month, but the 200 SMA is still holding as resistance

Skerdian Meta•Friday, July 9, 2021•2 min read
Jobs reversed in June in Canada

The USD/CAD was on a strong bearish trend from March last year until the end of May this year. The price declined more than 25 cents, as the USD/CAD fell to 1.20. But, that seems to have been the target for sellers, because after reaching that big round level, the USD/CAD reversed higher and has been bullish since.

The 20 SMA has turned into support  for USD/CAD

Moving averages were broken on the daily chart, and the 20 SMA (gray) turned into support. But, the 200 SMA (purple) seems to be holding as support now, especially after the decent decline in the Canadian employment rate today. Crude oil is also bullish today, which is helping the CAD. Although, CAD gains have been much smaller compared to the gains in crude oil, so I expect the bullish trend in the USD/CAD to resume soon.

USD/CAD Live Chart

USD/CAD

Highlights of Canada’s June 2021 employment report

Canada June employment

 

  • June employment 230.7K vs +195K expected
  • May employment was -68K
  • Full time -33.2K versus -13.8K last month
  • Part-time 263.9K versus -54.2K last month
  • Unemployment rate 7.8% versus 8.2% last month
  • Participation rate 65.2% versus 64.6% prior
  • Hourly wage rate for permanent employees -1.44% y/y prior
The decline in the unemployment rate is great, although the full-time job losses were a disappointment. Nonetheless, they held up well in May after the decline last month, so perhaps that’s not a big surprise. The reopening of the retail  sector is more of a factor for the increase in part-time jobs in any case.
What stands out for me is the climb in participation by 0.6%, combined with a 0.4% decline in unemployment. That’s a full point swing altogether, and it highlights a rapidly recovering labor force. Lockdowns are still in effect in July in much of Canada, but vaccination has been extremely fast and is nearing 80% with one jab. So the opening will be swift in July and August, and Macklem is likely to be optimistic next Wednesday, especially given that the latest GDP data was strong.
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

Related Articles

img
Forex Signals Brief April 8: Coinbase and Shopify Earnings Close the Season
1 day ago
img
Canada Elections 2025: Will Political Shifts Send USD/CAD Soaring or Crashing?
2 weeks ago
img
April 17 FX Signals: Can an ECB Hawkish Cut Crash DAX and Boost the Euro?
3 weeks ago

Comments

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers

trend BTC 0.0000
trend ETH 0.0000
trend EUR/USD 0.0000
trend DOW 0.0000
Alerts Rates Calendar Signals