The Canadian Dollar (CAD) is currently trading close to Friday’s closing level and is showing resistance to the bounce in the US Dollar (USD) that has followed Friday’s US jobs data. According to Scotiabank’s Chief FX Strategist Shaun Osborne, the CAD is holding below the 1.3585/95 resistance for the USD. Positive risk appetite in the market is helping the CAD to remain steady, with global stocks on the rise and crude oil slightly firmer. This has led to a “buy North America” sentiment across markets, although these trends are often short-lived.
While Friday’s Canadian employment data were close to expectations in headline terms, the composition of job gains was weak, with part-time positions dominating. The uptick in the unemployment rate has sparked speculation that the Bank of Canada (BoC) could increase the pace of easing in the coming months. Despite the CAD remaining relatively unchanged on the day, short, medium, and long-term price signals are all leaning bullish following Friday’s sharp market swings. Key resistance for the CAD remains at 1.3585/95, where the 200-day Moving Average converges with the range lows for the USD from earlier this year, before potentially pushing into the low 1.36s. Support levels for the CAD are at 1.3550 and 1.3520.
Overall, the CAD’s performance is being influenced by global market trends and economic data, particularly in comparison to the USD. The positive risk appetite and buy North America sentiment are helping to support the CAD against the USD. However, concerns about weak job gains in Canada and the potential for increased easing by the BoC are weighing on the currency’s outlook. Investors are closely monitoring key resistance and support levels for the CAD to gauge potential movements in the coming days. It will be important to watch for any further developments in economic data and central bank policies that could impact the CAD’s trajectory in the near future.
In conclusion, the CAD is currently holding steady against the USD, with short, medium, and long-term price signals pointing towards a bullish outlook. While positive market sentiment and support for North American currencies are aiding the CAD, concerns about weak job gains in Canada and potential easing by the BoC are posing challenges. Investors are closely watching key resistance and support levels to determine the CAD’s future movements. Stay tuned for further updates on how global market trends and economic data may impact the performance of the CAD in the coming days.
