USD/CAD refreshes 10-week low near 1.2450 on oil’s bull run
|- USD/CAD prints three-day downtrend to refresh multi-day low, retreats of late.
- Oil prices jump to the fresh seven-year top amid growing supply concerns.
- Comparatively better Canadian jobs report bears to tighten grips.
- Off in the US, Canada requires risk catalyst to be followed for fresh impulse.
USD/CAD extends Friday’s losses to renew multi-day low near 1.2450, down 0.10% intraday ahead of Monday’s European session.
In doing so, the Loonie pair tracks multi-month high of WTI crude oil prices, Canada’s main export, while also watching comparatively better employment data from Ottawa than Washington.
WTI crude oil rises to the fresh high since 2014, up 1.60% near $80.40 by the press time as markets fear more supply outages as tropical storm Pamela rushes towards the Gulf of Mexico and may hit the energy-rich region by the mid-week. Also favoring the black gold prices could be the positive headlines concerning US stimulus and hopes of economic recovery from the pandemic.
Be it Canada’s Net Change in Employment, Unemployment Rate or Average Hourly Wages, all of them outlawed the US jobs report for September, helping the USD/CAD bears to keep reins.
That said, the US Nonfarm Payrolls (NFP) dropped to 194K versus 500K expected but the prior reading got an upward revision to 366K. On the same line, the Unemployment Rate dropped to 4.8%, versus 5.1% expected and 5.2% prior, soothing the pains, whereas Average Hourly Earnings also jumped past 0.4% expected and revised down previous readouts of 0.4% to 0.6%.
On the other hand, Canadian Unemployment Rate matched the market consensus of 6.9% versus 7.1% prior whereas the Net Change in Employment rose past 65K forecast to 157.1K. Furthermore, Average Hourly Wages rose past 1.25% previous readouts to 1.70% during September.
Although oil prices help USD/CAD bears, holiday in the US and Canada joins mixed concerns over the Fed tapering to probe the pair’s further downside. Also, the risk-off mood underpins the US dollar’s safe-haven demand and adds to the downside filters for the pair.
Technical analysis
A daily closing below 200 and 100-DMA, respectively around 1.2515 and 1.2485, direct USD/CAD towards July’s low near 1.2420.
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