USD / CAD Updates Session Lows Following Upbeat Canadian Jobs Data

• USD / CAD struggled to capitalize on its positive intraday move past 1.2600.
• The loonie gained strong momentum following the release of stellar Canadian employment details.
• The rally in US bond yields, the stronger USD and weaker oil prices could help limit the decline.

The pair USD / CAD It fell around 30-40 pips during the early North American session and updated daily lows, below 1.2550 in reaction to upbeat Canadian labor data.

Following the previous day’s slide, the pair regained positive traction on the last trading day of the week and was supported by a combination of factors. A strong rally in US Treasury yields helped the US dollar rebound from lows of more than two weeks. Apart from this, a softer tone around crude oil prices undermined the Canadian dollar pegged to commodities and provided an additional boost to the USD / CAD pair.

The rally, however, lacked a strong follow-up and the USD / CAD pair once again struggled to find acceptance above 1.2600, instead meeting new offers at higher levels. The latest leg of a surge over the last hour or so was sponsored by stellar Canadian monthly employment details for March.

According to Statistics Canada, the economy added 303,100 jobs and the unemployment rate fell to 7.5% during the reported month. The readings were well above consensus estimates, which could force the BoC to slow down the pace of its bond purchases as early as April and acted as a positive trigger for the loonie.

Now it will be interesting to see if the USD / CAD pair can find any support at lower levels or if bearish traders are aiming to challenge the key psychological level of 1.2500. However, the pair is still on track to end the week with modest losses, although the lack of a strong follow-up warrants caution for bearish traders.

Technical levels