USD/CAD rebounds firmly to near 1.3360 due to downbeat Canadian Employment report

USD/CAD has shown a solid recovery from the crucial support of 1.3320 after weaker-than-anticipated Canada’s job market data.
Canada’s Net Change in Employment dropped by 17.3K and the Unemployment Rate jumped to 5.2%.
S&P500 futures have turned positive after recovering their entire losses, portraying a risk-on market mood.

Sagar Dua FXStreet

The USD/CAD pair has recovered sharply to near 1.3360 as Statistics Canada has reported poor Employment data (May). The Canadian labor market has posted a decline in payroll figures by 17.3K while the street was anticipating an addition of 23.2K. Last month the Canadian economy added 41.4K jobs. The Unemployment Rate has increased sharply to 5.2% vs. the estimates of 5.1% and the former release of 5.0%.

Apart from that, annual Average Hourly Earnings have softened to 5.1% from the prior release of 5.2%. This would also ease some heat in resilient consumer spending.

Considering the weakness in the Canadian Employment report, the Bank of Canada (BoC) might reconsider its intention of hiking interest rates further.

Investors should note that the BoC surprisingly raised interest rates by 25 basis points (bps) to 4.75% on Wednesday. BoC Governor Tiff Macklem decided to raise interest rates despite the consistent softening of Canada’s inflation. Consumer Price Index (CPI) in Canada was noted at 4.4% in April. BoC Macklem said in the monetary policy statement that inflationary pressures could turn sticky at these levels consumer spending is resilient. Also, remained doors open for further interest rate hikes.

S&P500 futures have turned positive after recovering their entire losses ahead of the New York session, portraying a risk-on market mood. Lowering the chances of one more interest rate hike from the Federal Reserve (Fed) has improved the appeal for risk-perceived assets.

The US Dollar Index (DXY) has retreated after failing to extend its recovery to near 103.60. Although expectations for a neutral interest rate policy stance by the Fed for the June meeting are skyrocketing, the release of the US CPI (May) data will be keenly watched which will release next week.

As per the preliminary report, headline inflation is expected to soften sharply amid declining oil prices while core inflation that excludes the oil and food prices could continue to remain persistent.

USD/CAD

Overview
Today last price	1.3332
Today Daily Change	-0.0026
Today Daily Change %	-0.19
Today daily open	1.3358

Trends
Daily SMA20	1.3502
Daily SMA50	1.3491
Daily SMA100	1.3516
Daily SMA200	1.3513

Levels
Previous Daily High	1.3388
Previous Daily Low	1.3334
Previous Weekly High	1.3651
Previous Weekly Low	1.3407
Previous Monthly High	1.3655
Previous Monthly Low	1.3315
Daily Fibonacci 38.2%	1.3355
Daily Fibonacci 61.8%	1.3367
Daily Pivot Point S1	1.3332
Daily Pivot Point S2	1.3306
Daily Pivot Point S3	1.3278
Daily Pivot Point R1	1.3386
Daily Pivot Point R2	1.3414
Daily Pivot Point R3	1.344

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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