Open an Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an Account
✖

USD CAD remains pressured after jobs data

Article By: ,  Financial Analyst
January 8, 2018 1:07 PM

Friday’s simultaneous release of US and Canadian jobs data for December resulted in USD/CAD extending its sharp slide of the past three weeks. Friday’s plunge was driven in large part by the contrast between the US and Canadian employment data, as the US headline number fell significantly short of expectations while Canada’s job creation in December far exceeded forecasts. Monday’s price action has seen a modest rebound for USD/CAD, which has pared some of Friday’s losses, but the currency pair remains pressured ahead of next week’s potentially pivotal interest rate decision from the Bank of Canada.

The US non-farm payrolls for December showed a disappointing 148K jobs added in December against prior expectations of around 190K. The unemployment rate came in steady and as low as expected at 4.1%, and wage growth also met expectations at a 0.3% increase in average hourly earnings month-over-month. While the smaller-than-expected increase in jobs for December still represented a solid showing overall for the US employment landscape, US dollar sentiment has been sharply bearish for the past several weeks, and a miss in the jobs data has not helped improve prospects for the greenback.

Meanwhile, Canadian jobs numbers once again came out much better than expected at 78.6K jobs added in December, versus a very low prior consensus forecast of only 1.8K. In addition, the unemployment rate fell even lower than the previous month to 5.7% against a prior forecast of 6.0%. This surprise jobs beat helped to boost the Canadian dollar against its major counterparts, most notably the struggling US dollar, ahead of the Bank of Canada’s rate decision scheduled for next week. Current consensus expectations point to another potential interest rate hike by the BoC – to 1.25% – after the central bank last raised rates back-to-back in July and September of last year.

From a technical perspective, USD/CAD has reached down to a key support area around the 1.2400 level. The broader trend for the currency pair shows a major downtrend from the highs of May 2017. In September, a substantial upside pullback occurred that brought USD/CAD back up to a 50% retracement of the broader downtrend. That 50% level served as key resistance from late October to late December. Since late December, the bearish bias has resumed, and could result in a continuation of the downtrend if expectations for the Bank of Canada continue to be more hawkish than expectations for the Federal Reserve. With any sustained breakdown below the noted 1.2400 support area, USD/CAD is potentially poised to target further downside support around the 1.2200 price level.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.

© FOREX.COM 2025