USD/CAD refreshes session lows on upbeat Canadian jobs data, lacks follow-through
|- USD/CAD struggled to capitalize on its intraday positive move beyond the 1.2600 mark.
- The loonie got a strong lift following the release of stellar Canadian employment details.
- Rallying US bond yields, stronger USD, weaker oil prices might help limit the downside.
The USD/CAD pair dropped around 30-40 pips during the early North American session and refreshed daily lows, below mid-1.2500s in reaction to upbeat Canadian jobs data.
Following the previous day's downfall, the pair regained positive traction on the last trading day of the week and was supported by a combination of factor. A sharp spike in the US Treasury bond yields assisted the US dollar to rebound from over two-week lows. Apart from this, a softer tone surrounding crude oil prices undermined the commodity-linked loonie and provided an additional boost to the USD/CAD pair.
The uptick, however, lacked any strong follow-through and the USD/CAD pair once again struggled to find acceptance above the 1.2600 mark, instead met with some fresh supply at higher levels. The latest leg of a sudden spike over the past hour or so was sponsored by stellar Canadian monthly employment details for March.
According to Statistics Canada, the economy added 303.1K jobs and the unemployment rate tumbled to 7.5% during the reported month. The readings were well above consensus estimates, which might compel the BoC to slow the pace of its bond purchases as soon as April and acted as a positive trigger for the Canadian dollar.
It will now be interesting to see if the USD/CAD pair is able to find any support at lower levels or bearish traders aim to challenge the key 1.2500 psychological mark. Nevertheless, the pair remains on track to end the week with modest losses, though the lack of any strong follow-through warrant caution for bearish traders.
Technical levels to watch
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