USD/CAD rallies over 100 pips, pushes towards 1.2800 after strong US/weak Canadian labour market reports


  • USD/CAD rose to fresh weekly highs near 1.2800, 100 pips up from earlier lows on Friday.
  • The catalyst for the bullish move was weak Canada/strong US labour market data.

USD/CAD got a double whammy of bullish impetus on Friday in the form of much stronger than expected US labour market data (USD bullish) and much weaker than forecast Canadian labour market data (CAD bearish). USD/CAD lurched to fresh weekly highs near 1.2800, a more than 100 pip or roughly 0.7% intra-day rally from earlier session lows in the 1.2660s. The pair appeared to run out of bullish momentum as it approached the 1.2800 level, with sellers coming in ahead of last week’s highs and a melt-up in crude oil prices helping to give the loonie a floor. WTI is up more than $2.0 on the day and at one point hit $93.00, fresh seven-year intra-day highs.

In light of the latest US and Canadian employment data for January, USD/CAD traders will now be reassessing their Fed/BoC calls for the coming months. Friday’s US jobs data, which saw a massive headline NFP beat, hot wage growth and a jump in labour force participation, has been interpreted as raising the risk of a 50bps move in March. Meanwhile, market commentators remarked that they did not think the latest Canadian numbers would deter the BoC from hiking by 25bps in March, given that the latest job losses relate to Omicron lockdowns and are expected to quickly come back.

Nonetheless, the latest data does highlight some economic divergence between the US and Canada and raises the risk that the Fed outpaces the BoC when it comes to monetary tightening this year, a fact that could offer USD/CAD long-term support. Next week, the main focus for USD/CAD trades will be on US Consumer Price Inflation data on Wednesday that may offer markets further reason to bet on a 50bps March hike from the Fed. Otherwise, Fed and BoC speak will be key themes to watch.

USD/Cad

Overview
Today last price 1.2766
Today Daily Change 0.0076
Today Daily Change % 0.60
Today daily open 1.269
 
Trends
Daily SMA20 1.2616
Daily SMA50 1.2717
Daily SMA100 1.2625
Daily SMA200 1.2513
 
Levels
Previous Daily High 1.2716
Previous Daily Low 1.2658
Previous Weekly High 1.2797
Previous Weekly Low 1.2554
Previous Monthly High 1.2814
Previous Monthly Low 1.2451
Daily Fibonacci 38.2% 1.2693
Daily Fibonacci 61.8% 1.268
Daily Pivot Point S1 1.266
Daily Pivot Point S2 1.263
Daily Pivot Point S3 1.2603
Daily Pivot Point R1 1.2718
Daily Pivot Point R2 1.2746
Daily Pivot Point R3 1.2776

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD attempts a bounce above 0.6850 as China's PMIs return to expansion

AUD/USD attempts a bounce above 0.6850 as China's PMIs return to expansion

AUD/USD is bouncing from the 0.6850 area, as bulls find support from the expansion reported in the Chinese NBS PMIs. The US dollar clings to recent gains amid a cautious market mood, awaiting the critical US PCE inflation. 

AUD/USD News

USD/JPY advances towards 137.00 amid firmer DXY and mixed Japan data

USD/JPY advances towards 137.00 amid firmer DXY and mixed Japan data

The USD/JPY pair is aiming to recapture its fresh 23-year high around 137.00 as the DXY has strengthened on hawkish commentary from Fed chair Jerome Powell. Japan’s mixed Industrial production data has weakened the yen bulls further.

USD/JPY News

Gold stays on the way to $1,807 support ahead of US PCE inflation

Gold stays on the way to $1,807 support ahead of US PCE inflation

Gold Price struggles to defend the previous day’s bounce off short-term key support during Thursday’s Asian session. In doing so, the yellow metal remains indecisive around $1,818. The yellow metal dropped to the lowest levels in two weeks the previous day.

Gold News

Polygon's MATIC price signals hard times to come, here's why

Polygon's MATIC price signals hard times to come, here's why
Polygon’s MATIC price signals bears have re-entered the market. If the profit-taking continues, a cataclysmic fall could occur to breach the $0.31 low
Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures