Home Forex News USD/CAD Grinds Lower As CAD Strengthens On Impressive Job Report

USD/CAD Grinds Lower As CAD Strengthens On Impressive Job Report

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  • Canadian Job Report
  • Canadian Economy Recovery Hopes
  • Declining Unemployment Rate

The Canadian Dollar started the week on a front foot as a better than expected job report reaffirmed optimism about Canadian economy recovery post-COVID-19. On the other hand, the U.S dollar was on the receiving end as traders turned to risk-sensitive currencies, amid optimism about the upcoming earnings season.

USD/CAD Outlook

The USD/CAD edged to four-day lows Monday morning as the Canadian Dollar continued to attract the bid tone in the currency market. However, the Canadian Dollar remains susceptible to weakness, given the uncertainty in the oil markets as oil prices remain under pressure amid demand recovery concerns.

Time                            : 07-13-2020

Pivot                           : 1.3581

Technical View           : Long above 1.3601

Target                         : 1.3611 – 1.3621 – 1.3635

Comments                  : Weak Bearish to Neutral

Last Price                    : 1.3640

Technical View           : Short below 1.3561

Target                         : 1.3541 – 1.3521

The Canadian Dollar is seen strengthening in the forex market as risk sentiment continues to ease in the wake of better than expected economic releases that led weakness in the U.S dollar. A confirmation that the Canadian economy added 952.9K jobs in June compared to a 289.6K increase in May is a development that continues to affirm expansion in the Canadian economy. The better than expected job report exceeded estimates of an increase of 550 K jobs.

The Canadian unemployment rate continues to decline affirming that the economy is slowly rebounding in the aftermath of the COVID-19 fallout. In addition, to employment data, the Manufacturing sector also continues to experience its fair share of expansion with the IVEY PMI data for June coming in at 58.2, affirming expansion against 39.1 reported in May.

CAD Strengthening

The Canadian Dollar continues to strengthen against the Dollar, which had strengthened on fears about economic recovery post-COVID-19. With economic releases showing significant improvement the USD/CAD exchange rate should remain under pressure as it had rallied on concerns about economic recession

With no major economic release planned for Monday, the focus will be on Fed Williams Speech on Monday, a development likely to sway traders’ sentiments on the Dollar conversely influence USD/CAD price action.

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