USD/CAD: on the eve of NFP publication and unemployment data
12/06/2019
Last Wednesday, the Bank of Canada left the key interest rate unchanged, signaling that additional monetary stimulus could be implemented in the foreseeable future. “Further decisions regarding rates will depend on the bank’s assessment of the negative impact of trade conflicts on the sources of stability of the Canadian economy”, the bank said in a statement.
The pair USD / CAD fell sharply after the decision of the Bank of Canada not to change the monetary policy. Having broken through the key support level of 1.3235 (EMA144 and EMA200 on the daily chart), USD / CAD continues to decline towards the lower border of the range located between the levels of 1.3138 and 1.3345.
A breakdown of the support levels 1.3042, 1.3015, corresponding to annual minimums, and a decrease to the area below the support level 1.2920 (EMA200 on the weekly chart) will indicate a break in the long-term bullish trend of USD / CAD.
In an alternative scenario, and after returning to the zone above the resistance level 1.3235, long positions will become relevant again.
On Friday, investors will be waiting for the publication of employment reports by the US and Canadian Department of Labor (at 13:30 GMT). Strong data expected in the USA. At the same time, unemployment remained at a multi-year low of 3.6%. Unemployment stays at current levels for 20 consecutive months. This is the longest period since the 1960s. The Fed is guided by the level of inflation, GDP and the state of the labor market, which remains a bright spot against the general background.
In Canada, unemployment in October was 5.5%. If unemployment rises, the Canadian dollar will decline. If the data turn out to be better than the previous value, the Canadian dollar will strengthen. A decrease in unemployment is a positive factor for the currency, an increase in unemployment is a negative factor.
Thus, during the publication of data from the US and Canadian labor markets (at 13:30 GMT), a sharp increase in volatility is expected in the financial market, especially in the USD / CAD pair.
Support Levels: 1.3138, 1.3100, 1.3060, 1.3042, 1.3015
Resistance Levels: 1.3235, 1.3286, 1.3300, 1.3325, 1.3345, 1.3380, 1.3400, 1.3452
Trading Recommendations
Sell Stop 1.3150. Stop-Loss 1.3210. Take-Profit 1.3138, 1.3100, 1.3060, 1.3042, 1.3015
Buy Stop 1.3210. Stop-Loss 1.3150. Take-Profit 1.3235, 1.3300, 1.3325, 1.3345, 1.3380, 1.3400, 1.3452
*) For up-to-date and detailed analytics and news on the forex market visit Tifia Forex Broker website tifia.com