USD/CAD Outlook: Loonie Advances Strongly on Upbeat Canada’s and Mixed US Jobs Data

Technical analysis of Forex market

Canadian dollar rose to five-week high against US dollar, boosted by upbeat Canada’s jobs data which showed 81.1K new jobs created in Aug vs 18.9K forecast and negative figure in July (-24.4). Mixed US jobs data, as NFP fell below expectations (130K vs 160K) and downward revised July figure (159K from 164K), conflict better than expected average hourly earnings (Aug 0.4% vs 0.3% f/c, which hit the highest since Feb). USDCAD pair extends bear-leg from 1.3382 (3 Sep high), following strong fall on Wednesday and Doji on Thursday, which presented consolidation. Fresh bears broke below 1.3199 (50% retracement of larger July/Sep 1.3015/1.3382 rally) and pressure pivotal supports at 1.3163/55 (daily cloud base / Fibo 61.8%), violation of which would generate fresh bearish signal. Rising bearish momentum and MA’s back to full bearish setup support the notion, as break of 1.3163/55 pivots would open way towards 1.3120 (200WMA) and 1.3096 (base of weekly Ichimoku cloud). The pair is on track for strong weekly bearish close (the biggest weekly loss since mid-June) that adds to negative outlook. Caution on oversold daily stochastic which signals that bears may take a breather before final push through 1.3163/55 supports. Broken 55DMA and 50% retracement (1.3185/99) offers immediate resistances, with stronger upticks expected to stay below broken Fibo 38.2% support (1.3242) to keep bears intact.

Res: 1.3185; 1.3199; 1.3242; 1.3257
Sup: 1.3163; 1.3155; 1.3120; 1.3096

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