- The Canadian economy added twice as many jobs as expected by economists, while the unemployment rate fell below 6%.
- US nonfarm payrolls disappointed, but the unemployment rate fell below 4%.
- USD / CAD Technical Outlook: A break below 1.2700 opens the door for a decline towards 1.2642.
The USD / CAD is extending its slide to two consecutive days in the week, briefly breaking the 50-day moving average (DMA) around 1.2687, then recovering the 1.2700 level after the Canadian and US employment data were released. At the time of writing this article, it is trading at 1.2686.
Canadian Employment Report Eclipsed US Nonfarm Payrolls
The Canadian economy’s agenda included the December 2021 employment report. Statistics Canada said the country added 54,700 jobs to the economy, doubling analysts’ estimates for a gain of 27,500. Additionally, the Unemployment Rate fell from 6.0% to 5.9%.
The drop in the unemployment rate is the lowest since February 2020, before Covid-19 emerged. After the December report, Canada’s labor market has increased 240,500 jobs above the pre-pandemic level. However, it should be noted that the survey was conducted between December 5 and 11, pre-outbreak of Ómicron in the country. Analysts expect a weaker January 2022 report on the latter mentioned.
At the same time, the US Bureau of Labor Statistics (BLS) reported that nonfarm payrolls increased by 199,000, worse than the 400,000 predicted by economists. The positive from the employment report is that the unemployment rate in the US fell below the 4% level, to 3.9%, below the estimated 4.1%.
Meanwhile, US Treasury yields fell somewhat, after hitting a daily high of around 1,771%, fell four basis points to 1,741%. The US Dollar Index, which was briefly below 96.00 at press time, stands at 96.03.
USD CAD Price Forecast: Technical Outlook
The USD / CAD 1-hour chart shows the pair biased to the downside after breaking the 50, 100 and 200 hourly Simple Moving Averages (SMAs), leaving them above price. Furthermore, the piercing of 1.2700 opened the door for a further decline towards the S1 daily pivot level at 1.2684. A breakout of that level would expose the January 4 daily low at 1.2667, followed by the S2 daily pivot at 1.2642.
Additional technical levels
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