Saturday, February 4, 2023

USD/CAD pars intraday gains, returns below 1.3600 after US/Canada data

  • USD/CAD finds itself in some intraday selling in reaction to Canada’s excellent jobs report.
  • The mixed US NFP data failed to impress or provide any significant boost to the USD bulls.
  • Price action warrants caution for bullish traders and positions for additional profits.

couple usd/cad It pared most of its intraday gains and declined below 1.2600 during the early hours of the North American session.

The loonie gets a strong boost in response to encouraging domestic employment data, which leads to some selling around the USD/CAD pair. In fact, Statistics Canada reported that the economy added 104,000 new jobs in December, beating the reading’s estimate of 8,000 by a wide margin. Furthermore, the unemployment rate unexpectedly fell to 5.0% during the reported month, down from 5.1% in November.

That being said, the soft tone around crude oil prices acted as a headwind for the commodity-linked loonie. This, along with intraday bullish sentiment around the US Dollar, helped the USD/CAD pair to maintain its modest gains for the second day in a row. Dollar bulls, for their part, don’t seem much impressed by encouraging US jobs data that showed the economy added an estimated 200,000 to 223,000 new jobs in December.

Additionally, the unemployment rate fell to 3.5%, beating estimates of 3.7%. That said, weak average hourly earnings data dwarfed the upbeat report, which along with a strong rally in US stock futures acted as a headwind for the safe-haven dollar. This, in turn, warrants some caution before positioning for aggressive bullish bets on the USD/CAD pair and extension of the overnight bounce from the 100-day SMA.

technical level to watch

Nation World News Desk
Nation World News Desk
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