Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Boom: Canadian Employment Data Much Better Than Expected

Published 2019-10-11, 10:20 a/m
Updated 2023-07-09, 06:31 a/m

The headline Employment Change for September was released at 53,700 today versus a market expectation of 10,000 and 81,100 last month. The unemployment rate is 5.5% versus 5.7% expected and 5.7% last. Average hourly wages (YoY) for September also increased 4.3% over August’s number vs 3.8% expected. This is a breath of fresh air for the Canadian economy, which released weaker inflation data and weaker retail sales data late last month.

The Bank of Canada now has their hands full. The BoC will have their next policy meeting on Oct. 30 (which happens to be the same date as the next FOMC policy meeting) where they will release their projections for the economy as well. At the last meeting, BoC chairman Stephen Poloz stated that “the current degree of monetary policy stimulus remains appropriate.” Will this still be true?

A rise in employment and earnings, combined with weaker retail sales and lower inflation will make this a tough decision for Poloz and company (note that we will see inflation data one more time before the Oct. 30 meeting).

Let’s quickly remind ourselves of where we are on the weekly chart in USD/CAD. We have been in a long-term symmetrical triangle and are currently coiling at the apex. A breakout through either trendline could provide direction over the long term.

Source: Tradingview, FOREX.com

On a 240-minute chart, price failed numerous times to stay above 1.3350, and upon release of today’s employment data, spiked lower through and upward sloping trendline going back to Sept. 10. For the moment, USD/CAD is holding previous lows near 1.3200. Next support zone is between 1.3150 and 1.3130, prior lows from mid-September.

Source: Tradingview, FOREX.com

However, on a daily chart, we get a better picture of the horizontal support and the rising weekly trendline near that 1.3130/50 level. If price breaks through these levels, USD/CAD can push much lower towards the 1.2000/1.2300 levels over the lower term.

Source: Tradingview, FOREX.com

Resistance comes in above at the break of the trendline near 1.3240 and above that near prior lows (which now act as resistance) near 1.3270.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.