- USD/CAD finds itself in some intraday selling in reaction to the stellar Canadian jobs report.
- Mixed US NFP data failed to impress USD bulls or provide any significant boost.
- Price action warrants caution for bullish traders and positioning for additional gains.
The pair USD/CAD paring much of its intraday gains and falling back below 1.2600 during the early hours of the North American session.
Loonie gets a strong boost in reaction to encouraging domestic employment data, which in turn causes some selling around the USD/CAD pair. In fact, Statistics Canada reported that the economy added 104,000 new jobs in December, beating estimates of a reading of 8,000 by a wide margin. Furthermore, the unemployment rate unexpectedly dipped to 5.0% during the reported month, from 5.1% in November.
That being said, the softer tone around crude oil prices acts as a headwind for the commodity-linked Loonie. This, along with the intraday bullish sentiment surrounding the US dollar, helps the USD/CAD pair maintain its modest gains for the second day in a row. Dollar bulls, for their part, don’t seem overly impressed by encouraging US jobs data, which showed the economy added 223,000 new jobs in December, up from an estimated 200,000.
Additionally, the unemployment rate dropped to 3.5%, beating estimates of 3.7%. That said, the weaker Average Hourly Earnings data dwarfs the upbeat report, which, coupled with a strong rally in US stock futures, acts as a headwind for the safe-haven dollar. This, in turn, warrants some caution before placing aggressive bullish bets on the USD/CAD pair and positioning for an extension of the overnight bounce from the 100-day SMA.
Technical levels to watch
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
