The USD/CAD pair was closed at 1.33817 after a high of 1.33983 and a low of 1.328929. Overall the movement of the USD/CAD pair remained bullish throughout the day. The pair USD/CAD surged on Friday amid the strong comeback of the market's greenback and drop in crude oil prices. The employment data from Canada and the US drove the pair USD/CAD on Friday.
At 17:30 GMT, the Employment Change in Canada for July suggested that the Canadian government introduced 418.5K / 0.418M jobs compared to the forecasted 395K. The Unemployment Rate from Canada also dropped to 10.9% in July from the expected 11.1% and the previous 12.3%. At 19:00 GMT, the Ivey PMI from Canada came in as 68.5 against the expected 57.5 and supported the Canadian dollar.
The initial reaction to the jobs data from Canada pulled the USD/CAD pair in the downward direction; however, the movement did not last for long, and the pair USD/CAD again started to move in the upward direction after the release of US jobs data. The US jobs data showed that the Average Hourly Earnings for June rose to 0.2% against the forecasted -0.5% and the previous -1.3%. The Non-Farm Employment Change from the US rose to 1763K from the anticipated 1530K. The Unemployment Rate of the US in June dropped to 10.2% from the expected 10.5% and supported the US dollar.
The better than expected US jobs data gave strength to the US dollar that ultimately pushed the USD/CAD prices higher on Friday. Meanwhile, the Crude oil prices suffered on Friday amid the escalating US-China tensions. The US President Donald Trump recently announced sanctions on Hong Kong Leader Carrie Lam and ten other top China & Hong Kong officials. This raised the fears of further escalation in the US-China tensions.
The US-China relations were also affected by the latest decision of US President Donald Trump to ban American companies from dealing with the Chinese apps, including TikTok and WeChat, amid the concerns of data privacy. The crude oil prices fell below $42 per barrel on Friday and weighed on commodity-linked Loonie that ultimately added USD/CAD pair gains.
Furthermore, the analysts at the National Bank of Canada explained that the Canadian dollar has firmed in the past months due to the rising commodity prices and positive economic surprises. The analyst believed that traders should remain cautious and careful in the run-up to the US Presidential election. On Monday, the Housing Starts data from Canada and the JOLTS Jobs Opening from the US will remain focused on attention by the USD/CAD traders.
Daily Technical Levels
Pivot Point: 1.3385
The USD/CAD is consolidating at 1.3385 level, holding below an immediate resistance level of 1.3395 level. This resistance level is extended by a downward trendline, which we can see on the 4-hour timeframe. On the lower side, the USD/CAD can find support at 1.3327 level, while the bullish breakout of 1.3395 level can extend the buying trend until 1.3457 level. On the 4 hour chart, the USD/CAD pair has closed candles over 50 EMA that support bullish sentiment for the USD/CAD pair. The RSI is also holding over 50 levels, suggesting a buying trend in the USD/CAD. For now, we should look for buying trades over 1.3395 level until 1.3457 targets. Good luck!