USD/CAD retests 200-day average after Canadian jobs data

The USDCAD pair retested the strong resistance at 1.2620 today, before erasing those gains and trading flat during the late US session.

Earlier in the day, Canadian labor market data for March were released. The net change in employment declined sharply to 72,500, down from 336,000 in February. On the other hand, the unemployment rate improved more than expected and ticked lower to 5.3%. Average hourly wages rose to 3.7% yearly from 3.3% previously.

The market currently prices in a 50 bps rate hike at the Bank of Canada monetary policy meeting next week. However, the OIS-based rate expectations suggest that the market more or less completely prices in a large rate step already. Therefore, the market could focus more on the daily chart, which seems a bit bearish for the Canadian dollar.

Meanwhile, the WTI oil has dropped significantly and dived below the psychological level of 100 USD and also below the 50-day moving average. Nevertheless, the medium-term outlook for the commodity is still looking bullish.

Technically speaking, It looks like the USDCAD pair has posted a double bottom near 1.2450, a bullish reversal formation. After today's data, we can see further upside, likely targeting the 200-day average at 1.2620 (the green line). If the USD/CAD pair jumps above that level, the short-term trend could change to bullish, with a possible rally to 1.28.