- Stellar US employment details (NFP) provided a goodish lift to the USD.
- Weaker oil prices, dismal Canadian data weighed heavily on the loonie.
- USD/CAD witnesses some aggressive intraday short-covering move.
The USD/CAD pair broke out of its daily consolidation phase and rallied over 80 pips in the last hour, hitting fresh session tops around the 1.3255-60 region.
The pair caught some aggressive bids during the early North-American session on Friday and finally confirmed to have snapped three consecutive days of losing streak in reaction to diverging employment details from the US and Canada.
Bulls are back in control
Data released this Friday showed that the US economy added 266K jobs in November, surpassing consensus estimates of 180K by a big margin, and the previous month's reading was also revised higher to 156K from 128K reported earlier.
Adding to this, the unemployment rate unexpectedly dipped to 3.5% during the reported month. Meanwhile, stronger-than-expected yearly wage growth rate helped offset a modest downtick in the monthly average earnings growth figures.
Stellar US monthly jobs report led to a sharp intraday upsurge in the US Treasury bond yields, which eventually underpinned the US dollar demand and trigger some near-term short-covering move around the major.
On the other hand, Canadian monthly jobs report disappointed on all front and came in to show that the number of employed people decreased by 71.2K in November and the unemployment rate jumped to 5.9% from 5.5% previous.
Against the backdrop of a modest pullback in oil prices, the disappointing data exerted some heavy downward pressure on the commodity-linked currency – loonie and remained supportive of the pair's strong intraday positive momentum.
The pair has now recovered a major part of its weekly losses and a subsequent move back towards the very important 200-day SMA, around the 1.3280 region, en-route the 1.3300 handle now looks a distinct possibility.
Technical levels to watch
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