USD/CAD Erases Early Gains After Disappointing NFP Data
The USD/CAD
pair reversed its early gains to 1.2900 handle and dipped back into
negative territory on disappoint US NFP print and drop in Canadian
unemployment rate.
According to the data released, US economy
added just 160,000 jobs in the month of April, much lower than an
expected print around 200,000. The unemployment rate held steady at 5.0%
while average hourly earnings rose 0.3%, which were in-line with
expectations.
Simultaneously, the Canadian monthly employment
report showed mixed reading with the number of employed people during
April falling by 2,100 while unemployment rate holding steady at 7.1%.
Immediately
after the releases, the pair erased its early gains and dropped to
1.2827 level but is currently trading at 1.2870, with marginal gains
from Thursday's close.
Technical levels to watch
The
pair continues to face strong hurdle near 1.2900 handle, marking a
short-term descending trend-channel resistance. A convincing break
through the descending trend-channel resistance would set the stage for
extension of the pair's near-term recovery trend towards 1.2980
horizontal resistance, closer to the very important 1.3000 psychological
mark.
On the flip side, a drop back below 1.2850 could drag the
pair back towards yesterday's low level support near 1.2785. A follow
through selling pressure now seems to open room for a further slide
towards its next major support near 1.2735 area.
