USD/CAD FORECAST POLARIZED AFTER OFFSETTING US JOBS REPORT & CANADIAN EMPLOYMENT DATA, FED & BOC RATE CUTS
- USD/CAD[1] is probing month-to-date highs but could struggle to continue its advance
- Jobs data out of the US and Canada this morning both topped estimates and showed strength amid the coronavirus outbreak and interest rate cuts from both the Fed and BOC
- The uptrend in spot USD[2]/CAD[3] price action this year carries serious impetus and might be driven largely by crashing crude oil prices[4]
This morning’s nonfarm payrolls report[5] out of the United States crushed market estimates – as did latest data on the Canadian labor market[6]. Better-than-expected employment data from both the US and its northern neighbor largely countered one another and caused an overall muted reaction in spot USD/CAD price action. The US and Canadian jobs reports follow interest rate cuts delivered by the Federal Reserve (Fed) and Bank of Canada (BOC) earlier this week.
Read More: USD/CAD Price Outlook Clouded as Fed & BOC Cut Rates[7]
As such, forex traders are battling over where USD/CAD heads next. With outlook for the US Dollar[8] to Canadian Dollar mired by conflicting fundamental developments this year, like lofty FOMC[9] rate cut bets and collapsing crude oil prices[10], which have largely resulted indirectly from the ongoing coronavirus outbreak, it may prove useful to turn to the charts for an assessment of USD/CAD price action.
USD/CAD PRICE CHART: DAILY TIME FRAME (DECEMBER 2018 TO MARCH 2020)
Taking a high-level view of USD/CAD since the beginning of last year reveals three overarching technical developments: a massive amount of confluence around the 1.34 handle, the
