Canadian employment details overview
Statistics Canada is scheduled to publish the monthly jobs report for November later this Friday at 13:30 GMT. The Canadian economy is expected to have added 35,000 jobs during the reported month, up from 31,200 reported in October. The unemployment rate is seen ticking lower to 6.6% from 6.7% previous.
Meanwhile, analysts at CIBC sounded downbeat about the report and wrote: “We are only pencilling in an addition of 10K jobs for the month, which would likely see the unemployment rate rise at least a tick to 6.8%.”
How could the data affect USD/CAD?
Ahead of the key release, the prevalent US dollar bullish sentiment pushed the USD/CAD pair to the highest level since September 21. However, a strong follow-through recovery in crude oil prices acted as a tailwind for the commodity-linked loonie and capped gains for the major.
Meanwhile, the data is likely to be overshadowed by the simultaneous release of the US monthly jobs report (NFP), suggesting that any immediate market reaction is more likely to be short-lived. Nevertheless, any significant divergence from the expected readings would influence the Canadian dollar and infuse some volatility around the major.
From a technical perspective, the intraday move up struggled to find bullish acceptance above the 1.2830-35 resistance zone. This makes it prudent to wait for a strong follow-through buying before positioning for any further appreciating move towards the September monthly swing high, around the 1.2900 round-figure mark.
On the flip side, any meaningful corrective pullback below the 1.2800 mark might continue to attract some buying near the 1.2740-35 horizontal support. This is followed by the weekly low, around the 1.2715-10 region, which if broken decisively might prompt some technical selling. The pair might then turn vulnerable and accelerate the fall towards the next relevant support near the 1.2640 region.
Key Notes
• Canadian Jobs Preview: Forecasts from five major banks, labour market to keep pressuring the BoC
• Investors eye NFP, Canadian job data
• USD/CAD: Upward momentum prevails, August high at 1.3020 in the crosshairs – SocGen
About the Employment Change
The employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive, or bullish for the CAD, while a low reading is seen as negative or bearish.
About the Unemployment Rate
The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to weaken the Canadian economy. Normally, a decrease of the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.
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