Briefly –
- USD/CAD price recorded a bullish breakout following the Canada jobs statistics.
- The Canadian economy lost more than 30.6K jobs lost month (July 2022).
- Meanwhile, the US added more than 528K jobs during that month.
The USD/CAD pair recorded a massive bullish comeback following the Canada and United States jobs statistics. It climbed towards 1.2985, the highest mark since 18 July. Moreover, the pair has gained over 1.8% from this month’s low.
The Diverged United Stated and Canada Labor Market
The USD-CAD price surged swiftly following the diverging job figure from Canada and the United States. Canadian statistics confirmed that the nation lost jobs in July amidst stalled economic recovery. The country lost about 30.6K jobs over the past month, another massive addition to the 43.2K jobs lost in the prior month.
Meanwhile, economists expected the labor market to add more than 20K employments. Nevertheless, 13.1K full-time and 17.5K part-time individuals lost their occupations.
More data indicated the participation rate plummeted to 64.7% from 64.9%. Again, worse than the +65.3% estimated. Unemployment remained the only optimistic part of the report. Statistics Canada revealed that the unemployment rate stayed unaltered at 4.9%.
USD/CAD price surged after the United States’ data confirmed that the labor market remained strong. The official NFP (non-farm payrolls) data indicated that the nation added more than 528K jobs last month. Also, the agency adjusted its previous 372K estimate to 398K.
More data from the report suggested that the US unemployment rate declined to 3.5% from 3.6%. Also, better than the 3.6% median estimate. Moreover, wages continued to surge in July. The average 1hr earnings increased to 0.5% from 0.4% on MoM (month-on-month) basis. Meanwhile, it stayed at 5.2% on Y/Y.
Thus, the USD-CAD price soared as market participants expected a more hawkish Fed. They trust the central bank will introduce several additional rates in 2022.
USD/CAD Prediction
The 4hr chart indicated that the USD-CAD exchange rate recorded a massive bullish break on Friday. The pair climbed beyond the descending channel’s topside.
Moreover, it crossed above the 25 and 50-day MAs. The RSI remained elevated, nearing the overbought region. Thus, USD/CAD might keep surging as bulls target the 1.3085 resistance.
