USD/CAD Back in the Wedge After Strong Canadian Employment Numbers for September

Posted Sunday, October 8, 2023 by
Skerdian Meta • 2 min read

USD/CAD turned bullish in July as the USD gained momentum, although we saw a retrace lower in the second week of September, from below 1.37, which is a resistance zone and the top of the wedge also stopped the bullish move, as commodity dollars found some support, despite the US dollar’s resiliency, which was supported by strong economic data. the Canadian dollar, which benefitted from an increase in oil prices, with WTI reaching $95 on Thursday last week before reversing course and sliding below $90 in the following three days.

However, this pair resumed the uptrend again and climbed above the 1.37 level. However, since Thursday of last week, crude Oil has dropped nearly $15, which has contributed to this pair’s rise. USD/CAD has surged higher to 1.3788 by the middle of this week, but retreated lower in the last two trading days, as the USD slipped back. We have been long on this pair although we’ll see how it behaves this week before taking a position.

Canadian September 2023 Jobs Report

Canada — Candor jobs data shows a stronger-than-expected increase

September employment change 63.8K vs 20.0K expected
August employment change was 39.9
employment change 63.8Kvs 20.0K estimate.
Unemployment rate 5.5% vs. 5.6% estimate. Last month 5.5%.
Full-time employment 15.8K vs 32.2K last month
part-time employment 47.9K vs. 7.8k last month.
Participation rate 65.6% vs 65.5% last month.
Average hourly wages permanent employees 5.3% vs 5.2% YoY last month

Other details from StatCan:

Core-aged women (25-54 years) saw an employment increase of 37,000 (+0.6%), and men in the same age group saw an increase of 32,000 (+0.5%).
Employment in educational services rose by 66,000 (+4.5%), and transportation and warehousing saw a 19,000 (+1.8%) increase.
Employment decreased in finance, insurance, real estate, rental and leasing by 20,000 (-1.4%), in construction by 18,000 (-1.1%), and in information, culture, and recreation by 12,000 (-1.4%).
Six provinces, led by Quebec (+39,000; +0.9%) and British Columbia (+26,000; +0.9%), experienced employment growth, while Alberta (-38,000; -1.5%) and New Brunswick (-2,700; -0.7%) saw declines.
Average hourly wages increased by 5.0% (+$1.63 to $34.01) year-over-year in September.
Total hours worked remained almost the same in September but increased by 2.6% year-over-year.