Canadian Dollar Holds Range Ahead of Key Data

The US Dollar (USD) inched higher against the Canadian Dollar (CAD) on Friday, increasing the price of USD/CAD to more than 1.3750 ahead of Canada’s employment change report. The technical bias remains bullish because of a higher high in the recent upside move.

Technical Analysis

As of this writing, the pair is being traded around 1.3784. A hurdle can be seen near 1.3809, the trendline resistance as demonstrated in the given below hourly chart with red color. A break and hourly closing above the 1.3809 resistance shall trigger fresh buying pressure, opening the door for a move towards the 1.3900 resistance which is a psychological level.

On the downside, a support may be seen near 1.3750, the confluence of 23.6% fib level as well as horizontal support ahead of 1.3727, the trendline support as demonstrated with pink color in the given above hourly chart and then 1.3700, the psychological number. The technical bias shall remain bullish as long as the 1.3700 support zone is intact.

How USDCAD Reacted on Canada’s Employment Releases in Past?

The USDCAD fell by more than 40 pips after the release of Canada’s employment change report on 7th April, 2017. The actual outcome was 19.4k new jobs as compared to the forecast of 5k.

The pair showed the same reaction, plunging by more than 60 pips after the release of March’s employment change report. The actual outcome was 15.3k new jobs as compared to the forecast of 2.5k.

Not to mention, the above mentioned volatility in the USDCAD was not influenced solely by the Canada’s employment change release, there were some other important news events as well that contributed in the aforementioned price movement in the pair.

How to Trade today’s Employment Change Report

Buying the pair around current levels can be a good strategy in short to medium term as bulls still look in control.

What Assets to Trade?

In addition to USDCAD, trading CADJPY, GBPCAD and CHFCAD can be a good strategy as the aforementioned pairs are highly reactive to the Canada’s economic releases.

 

usmanahmed7290@gmail.com'

Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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