USDCAD Above the Triangle After Uptick in Canada Unemployment
USDCAD was consolidating within a triangle for two months, but recent developments, prompted a breakout above the triangle.
USDCAD had been consolidating within a triangle for two months, but yesterday’s developments, including the positive Canadian jobs news and the stronger US Non-Farm Payrolls (NFP) report, prompted a breakout above the triangle. The Canadian unemployment claims ticked higher to 6.2%, which provided a bid for the USD/CAD pair, contributing to the bullish breakout above the triangle pattern.
Additionally, the stronger-than-expected US NFP report further bolstered this forex pair, leading to a significant rise of 100 pips. This upward movement resulted in the pair breaking above the falling trendline of the triangle pattern, indicating a potential shift in momentum in favor of the USD. The pair closed the week at 1.3765, marking a notable increase from its previous levels.
USD/CAD Chart H4 – The Triangle Has Been Finally Broken
The Bank of Canada’s dovish rate cut announcement on Thursday suggested potential future rate cuts if inflation continues to decline. However, despite this announcement, the Canadian dollar (CAD) strengthened against the US dollar (USD) on the day, since the market participants had already priced in the rate cut and its dovish implications, leading to limited reaction from currency markets.
However, the strong NFP employment and the unemployment rate form Canada which showed an uptick, gave this pair a push higher, sending it above the triangle. So, now the descending trendline should turn into support for USD/CAD, so we will try to buy pullbacks down there.
May Employment Change Released by Statistics Canada – 7 June 2024
- Employment Change: There was an increase in employment of 26.7 thousand jobs, surpassing expectations of 22.5 thousand. However, this is notably lower than the previous month’s figure of 90.4 thousand.
- Unemployment Rate: The unemployment rate remained unchanged at 6.2%, in line with expectations. This indicates stability in the labor market, although the rate remains elevated compared to pre-pandemic levels.
- Participation Rate: The participation rate held steady at 65.4%, indicating that the proportion of the working-age population actively participating in the labor force remained unchanged.
- Full-time Employment: There was a decline in full-time employment by 35.6 thousand jobs compared to the previous month’s increase of 40.1 thousand. This suggests a decrease in the number of individuals working full-time positions.
- Part-time Employment: Part-time employment saw an increase of 62.4 thousand jobs, higher than the previous month’s figure of 50.3 thousand. This indicates a rise in the number of individuals employed in part-time positions.
USD/CAD Live Chart
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