The US Dollar (USD) inched lower against the Canadian Dollar (CAD) on Monday, dragging the price of USDCAD to less than 1.3100 following the release of Canada’s employment report. The technical bias remains bearish because of a lower low and lower high in the recent downside move.
As of this writing, the pair is being traded around 1.3098. A support may be noted near 1.3062 (the 23.6% fib level as well as lower trendline) ahead of 1.2968 (the low of the last major downside move) and then 1.2900 (the psychological number).
On the upside, the pair is expected to face a hurdle near 1.3212 (the high of Tuesday) ahead of 1.3283 (the 50% fib level) and then 1.3387 (the high of the last major upside rally) as demonstrated in the above daily chart. The technical bias shall remain bearish as long as the 1.3387 resistance area is intact.
Canadian Unemployment Rate
Canada’s unemployment rate fell 0.1 per cent in January to 6.8 per cent, the government said Friday. Some 48,000 new jobs were added, in contrast with forecasts that had predicted a modest loss of 10,000 jobs and a stable unemployment rate. Year-over-year employment grew by 276,000 jobs (+1.5 per cent), with the bulk of hires occurring since August. Job growth was strongest in the service sector, but declined in the information, culture and recreation sectors. Employment grew among men and women age 25-54 and varied little in other population segments, according to Statistics Canada.
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.