US and Canadian Jobs Data and the USD/CAD Outlook

US and Canadian Jobs Data and the USD/CAD Outlook

Today we had key jobs data out of the US and Canada. Let’s take a look at these data points and the outlook on the USD/CAD.

US NFP (Apr.): 223K
Forecast: 228K
Previous: 85K (revised from 126K)
(click to enlarge; source:
Unemployment Rate (Apr.): 5.4%
Forecast: 5.4%
Previous: 5.5%
Average Hourly Earnings (Apr.): 0.1%
Forecast: 0.2%
Previous: 0.2% (revised from 0.3%)

US jobs data was somewhat disappointing, but there is hope. The headline NFP reading just missed forecasts, but the fact that it as above 200K is decent if the economy can continue adding at least this many jobs a month in the next few months. The April data is decent enough to brush off the poor data in March, which was actually revised even lower.

However, wage growth is still stalling, and the FOMC will therefore be tentative about raising rates in September until that picks up.

CAN Employment Change (Apr.): -19.7K
Forecast: -4.5K
Previous: 28.7K
(click to enlarge; source:
CAN Unemployment Rate (Apr.): 6.8
Forecast: 6.9%
Previous: 6.8%
Job data in Canada was starting to turn up in 2015, but the April reading was disappointing. The market did expect a net loss of jobs in the economy, but the print was much lower. A lot of this can be attributed to the 4-year high in the drop of part-time work. While this could be a one-off thing, the CAD should definitely find it difficult to continue its recent strength. Let’s take a look at the USD/CAD.

USD/CAD Daily Chart 5/8
(click to enlarge)

The daily USD/CAD chart shows a range over the past couple of weeks between roughly  1.1940 and 1.2205. Today’s reports did not help the market find direction outside of this range. I would say that the fundamentals favor the US a bit, and a break above 1.2205 should at least send the pair to test the 1.2350-1.24 area, which was a previous support zone. Then, if price can start holding above 1.22 on a subsequent pullback, we should start considering the bullish continuation scenario.

Now to the downside, a break below the 1.1940 low should open up some downside risk, but I would still consider this a correction and limit the downside risk to a support pivot around 1.18, which is also where the 200-day SMA resides.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at