The Canadian employment data for August was released at 8:30AM EDT this Friday (8/10). Employment change, which showed an addition of 7.3K jobs in June, was forecast to show 9.6K in July, according to ForexFactory. Instead of improving, the jobs data showed a loss of 30.4K jobs in July. The unemployment rate edged up from 7.2% to 7.3%. The Loonie has been strong this entire week as seen in the USD/CAD, and shows an initial reactionary weakness to this poor jobs report.
USD/CAD 4H Chart 8/10/2012 9:05AM EDT
The USD found some support ahead of the jobs data at the 0.9910 level. It went into the risk event rallying above a declining trendline in the short-term, as well as cracking the 60 level in the 1H RSI reading, which is a sign that USD/CAD lost the bearish momentum established in the August bear-run so far. However, as we get into the US session, the risk-event -reaction to the upside saw some rejection after cracking above the previous near-term consolidation support at 0.9962.
The market is not completely flowing into the USD/CAD long trade, but if it fails to break below the 0.9940 level, the most recent near-term resistance pivot, then we are still in a bullish attempt back toward the parity, 1.00 level.
Below 0.9940, it becomes unclear, with the bearish outlook revived if the market falls below the 0.9924 pivot.
The 4H chart shows that the market is still bearish, but we are at a projected channel support. There is a chance that today’s (8/10) candle will engulf the previous bearish candle. This suggests first a test of 1.00, and with consideration of the medium term bearish mode, a maximum bullish outlook to 1.01, 200-Day SMA and declining trendline.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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