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

 

 

Share: Feed news

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended content

Editors’ Picks

EUR/USD trims gains, back below 1.1300

EUR/USD trims gains, back below 1.1300

EUR/USD gained bullish traction on Monday, climbing above the 1.1300 mark as the US Dollar came under sustained selling pressure. The move followed Moody’s downgrade of the US sovereign credit rating, which added to the pair’s upside momentum.

GBP/USD sticks to daily gains around 1.3360

GBP/USD sticks to daily gains around 1.3360

GBP/USD extended its rally on Monday, briefly surpassing the 1.3400 mark on the back of renewed weakness in the Greenback, which was particulalry exacerbated following Moody’s decision to downgrade the US credit rating by one notch.

Gold meets daily resistance around $3,250

Gold meets daily resistance around $3,250

Gold regained momentum on Monday, climbing toward the $3,250 mark per troy ounce in response to a cautious market tone. In fact, investors sought safe-haven assets in response to Moody’s downgrade of the US government’s credit rating and renewed trade concerns.

Stock futures contract after Moody's US debt downgrade

Stock futures contract after Moody's US debt downgrade Premium

US stocks opened on a sour note on Monday following the fallout late Friday when the Moody's credit rating agency lowered its outlook on US debt from Aaa to Aa1. Moody's had already had the US government on watch for a year and half, so the actual downgrade shouldn't have surprised investors too much.

China April slowdown shows the impact of economic uncertainty

China April slowdown shows the impact of economic uncertainty

Trade war uncertainty is denting Chinese confidence, resulting in slower economic activity in April. Retail sales and fixed-asset investment both underperformed forecasts amid heightened caution. Yet the impact on manufacturing was less than feared.

The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025