Once again, Canada blows away jobs estimates

Canada released the Employment Change for January, and the results were stellar. The Canadian economy added 150,000 new jobs in January vs an expectation of 15,000 and a December print of 69,200. What adds to the strength of this data is that 121,100 of the jobs were full-time jobs vs 28,900 part-time jobs. We should note that December’s prints were revised lower, however they were still much stronger than the estimates. The Unemployment Rate remained steady at 5% vs 5.1% expected. In addition, Average Hourly Earnings fell to 4.5% YoY vs 4.7% YoY in December.

The Employment Change results should lead one to question the estimates for this data. In October, the actual print of 119,300 blew away estimates, similar to today's print. In December, the expectation was for -10,000 jobs, while the actual print was 84,500. This print was revised lower today to 70,900, however it is still well above the -10,000 estimate. And for January, the print was 150,000 vs an estimate of 15,000. Therefore, estimates going forward need to be taken with a grain of salt as economists seem to be having difficulty estimating the Employment Change.

USD/CAD sold off initially after the data was released as markets think that the strong jobs data means more rate hikes are ahead.

Source: Tradingview, Stone X

On a daily timeframe, USD/CAD had formed a head and shoulders pattern off the highs of October 13^th at 1.3978 and broke the neckline convincingly on November 10^th near 1.3496. Price moved lower but failed to reach the target for the head and shoulders pattern near 1.3030, holding support at 1.3226. USD/CAD then retraced 61.8% of October 2022 highs to the November 15^th, 2022 lows, forming a flag pattern. The target for the flag pattern is near 1.2960. Price broke out of the flag pattern on December 22^nd, 2022 and moved below the 50 Day Moving Average on January 9^th. However since then, despite today’s strong payroll data, USD/CAD has been trading in a range between 1.3267 and 1.3521.

Source: Tradingview, Stone X

On a 240-minute timeframe, one can better see the range that the USD/CAD has been in since early January. If the pair continues to move lower, first support is at the lows of February 2^nd at 1.3262. Below there, price can fall to a confluence of support at the 200 Day Moving Average (see daily) and the lows of November 15^th, 2022, between 1.3223 and 1.3233, and then the psychological round number support level of 1.3000. However, if price bounces and remains in the range, the first resistance is at the 50 Day Moving Average at 1.3489 (see daily). Above there, price can move to Friday’s high of 1.3476, then the highs from January 18^th at 1.3521.

Source: Tradingview, Stone X

With the strong Canadian Employment data, traders may be wondering if the BOC will hike rates again sooner rather than later. This idea sent USD/CAD lower. However, the pair still hasn’t broken out of its recent range. It may have to wait until Tuesday’s US CPI print to determine the next direction for the pair.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

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. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.