USD/CAD Tries to Defend Familiar Support

Friday's Jobs Report

The headline print of +199K employment positions in the US for December was disappointing, but the rest of the Jobs report was solid as unemployment continued to decline, participation rate inched up slightly and wage inflation picked up.

Canada also released its employment figures on Friday, which showed the addition of 54.7K jobs last month – better than forecasted, but much lower than November's blowout print (+153.7K). Unemployment retreated to 5.9%, from 6% prior.

USD/CAD Reaction

The pair reacted lower on the results, registering its second straight losing day, in an overall inconclusive week. The new one started on the back foot, but it bounces off key support as we head towards the US session and sentiment deteriorates.

Bears tested the familiar 1.2626-05 area but this this triggered a bounce, same way it had done in early December and late and at the turn of the year as well. Along with the slide in oil prices and oversold conditions pointed by the Stochastic, USD/CAD may be able to push for the EMA200 (at around 1.2730), above which the downside bias will ease.

The upside however has multiple roadblocks and a sustained recovery beyond 1.2500 may prove more difficult, while last year's highs (1.2965) are distant at this point.

The aforementioned 1.2626-05 region that provides support for now, may prove critical, since it contains the 200Days EMA and the 50% Fibonacci of the "October Low/December High" rise. As this is being tested by sellers, the pair is vulnerable to 1.2526-1.2492, but it is probably early for a breach of 1.2287.

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Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

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