- Canadian employment change: 15.4k vs 21.3k exp and -88.0k prior
- Full time change -39.3k vs 49k prior
- Despite soft data CAD remains higher; USDCAD and EURCAD at key levels
Whilst the Lion’s share of attention was on the US jobs report, the Canadian one produced some interesting developments with a smaller than expected return to growth, although the composition of the jobs added were weak.
There was an improvement in the latest labour market data from Canada, but this was largely due to part time roles. Source: XTB Macrobond
The employment change in February showed 15.4k jobs added, slightly less than the 21k expected but still a marked improvement on the previous drop of 88k. However, CAD traders often look deeper into the release with the number of full time and part time roles added providing further insight into how permanent the placements are.
Here lies some possible weakness with full time jobs actually falling to 39.3k from 49k prior whilst the part time numbers improved from -137k to 54.7k. The market reaction was slightly positive considering, with the Canadian dollar currently edging higher on the day. Two pairs that could be interesting to keep an eye on going forward are the USDCAD and EURCAD.
This pair attempted to make a break higher earlier this week and in doing so hit an 8 month high at 1.2999 - agonizingly close to trading with a 1.30 handle. However there was quite a reversal following Trump’s backwards step with regards to tariffs and there could be an inverted hammer forming on W1. 1.2885 is a key level to watch for tonight’s close and if the market ends below there then it looks like its been a false break.
USDCAD could be set to reject the breakout seen early this week and may fall back into its prior range if it ends the day below 1.2885. Source: xStation
This cross has enjoyed a strong run higher in recent weeks after breaking out above 1.5280 at the beginning of the year. However price has shown similar action to that in the USDCAD and could also be set for an inverted hammer on W1. Similar to the aforementioned pair the possible reversal signal comes at an area of prior resistance with the 2016 high of 1.6120 once more being defended by sellers. Given the data just released, tonight’s close could be key and if the pair ends on or near its lows then there could be more weakness ahead.
EURCAD looks like it could be set to print a reversal signal at prior resistance of 1.6120. Source: xStation
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