The USD/CAD pair ticked higher on Friday, preparing for today’s labor market updates from both countries. As of writing, it was seen hovering slightly below the 1.29 level.
US jobs market update
Later today, the primary subject will be the US employment numbers. The country will first release its Nonfarm Payrolls statistics, which are expected to show 250,000 new jobs added in July, down from 372,000 in June. Even though it would be the smallest growth in that period, that would be the 19th month in a row that payrolls have grown; also, it is projected that the unemployment rate will remain at 3.6%.
Canadian data too
Investors anticipate that the net employment change will marginally improve from -43,200 to 20,000 when the Canadian jobs market data is also revealed. After that, however, the unemployment rate is anticipated to rise to 5.0%. The USD/CAD pair will hence surely be volatile following that.
“The CAD is most correlated with US equities and broad USD variation, neither of which will be affected by this data release. As a result, the 1.28/29 range should persist, and dips in USDCAD are a fade. Overall direction will depend on the Treasury market. Still, an upside surprise on jobs supports both wider Canada-US spreads and a flatter curve domestically.” analysts at TD Securities (TDS) offered a brief preview of the Canadian monthly employment report.
Considering the recent plunge in oil prices, when the WTI benchmark dropped from 105 USD to 90 USD in a few days, the Canadian dollar has been holding pretty well.
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Elsewhere, the US Secretary of State Anthony Blinken is on the wires again, via Reuters, saying that “China’s provocative actions a significant escalation.”
The United States has told China repeatedly it does not seek a crisis. Pelosi’s visit was peaceful, with no justification for China’s extreme response
It looks like a slow grind toward the key selling zone near 1.29, with a triangle pattern forming. If the price jumps above 1.29 after today’s data, we might see another retest of the critical 1.30 level.
On the downside, the support seems to be at the short-term upward line at 1.2840; if not held, the USD might decline toward 1.28.