Boom: Canadian Employment Data Much Better than Expected

Forex.com Team Forex.com

The headline Employment Change for September was released at 53.7K today vs a market expectation of 10.0K and 81.1K last. The unemployment rate is 5.5% vs 5.7% expected and 5.7% last. Average hourly Wages (YoY) for September also increased 4.3% over August's number vs 3.8% expected. This is a breath of fresh air for the Canadian economy, which released weaker inflation data and weaker retail sales data late last month.

The Bank of Canada now has their hands full. The BOC will have their next policy meeting on October 30th (which happens to be the same date as the next FOMC policy meeting) where they will release their projections for the economy as well. At the last meeting, BOC President Poloz stated that "the current degree of monetary policy stimulus remains appropriate". Will this still be true? A rise in employment and earnings, combined with weaker retail sales and lower inflation will make this a tough decision for Poloz and company (note that we will see inflation data one more time before the Oct 30th meeting).

Let's quickly remind ourselves of where we are on the weekly chart in USD/CAD. We have been in a long-term symmetrical triangle and are currently coiling at the apex. A breakout through either trendline could provide direction over the long term.

Source: Tradingview, FOREX.com

On a 240-minute chart, price failed numerous times to stay above 1.3350, and upon release of today's employment data, spiked lower through and upward sloping trendline going back to September 10th. For the moment, USD/CAD is holding previous lows near 1.3200. Next support zone is between 1.3150 and 1.3130, prior lows from mid-September.

Source: Tradingview, FOREX.com

However, on a daily chart, we get a better picture of the horizontal support and the rising weekly trendline near that 1.3130/50 level. If price breaks through these levels, USD/CAD can push much lower towards the 1.2000/1.2300 levels over the lower term.

Source: Tradingview, FOREX.com

Resistance comes in above at the break of the trendline near 1.3240 and above that near prior lows (which now act as resistance) near 1.3270.

Author

Forex.com Team

Forex.com

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

XRP struggles around $1.40 despite institutional inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.