- The US created more jobs in May than economists had predicted.
- The unemployment rate in the US rose from 3.9% to 4.0%.
- The Fed’s total rate cuts expected this year fell from 50 to 35 basis pointss.
The USD/CAD forecast looks promisingly bullish as the greenback gains after Friday’s unexpectedly strong jobs report. US non-farm payrolls overshadowed employment gains in Canada and weighed on the Canadian dollar.
–Are you interested in learning more about Ethereum price prediction? Check out our detailed guide-
Data on Friday showed the US added more jobs in May than economists had forecast. Employment rose by 272,000 compared with expectations for a 185,000 gain. Consequently, the labor market remains strong despite high interest rates. The Fed is likely to push back the timing of the first tapering as it waits for more evidence of a slowing economy.
However, there were some signs of weakness in the sector, as seen in the unemployment rate, which rose from 3.9% to 4.0%. However, it was not enough to keep expectations of a rate cut from falling. Before the report, there was almost a 70% chance the Fed would cut rates in September. However, this fell to 50% when market participants realized that labor market demand remained relatively high. Moreover, the total reductions expected this year fell from 50 to 35 basis points.
At the same time, Canada released its monthly employment report, which showed a marginal increase in employment, beating forecasts. Meanwhile, the unemployment rate rose from 6.1% to 6.2% in April. The result was a drop in the probability of a Bank of Canada rate cut in July from 50% to 44%. However, the rising US dollar overshadowed any strength in the Canadian dollar.
USD/CAD Key Events Today
There will be no high-impact releases from the US or Canada today. As a result, the price is likely to consolidate.
USD/CAD technical forecast: around 1.3780 after channel breakout
On the technical side, the USD/CAD price made a bold, bullish move and broke out of its shallow bearish channel. Initially, the bulls tried to break through the channel resistance but failed, making a big fuse. The price then pulled back to retest the 30-SMA support, which remained firm. The pair made another strong bounce from here that broke the channel resistance and the 1.3720 level.
–Are you interested in learning more about Crypto Signals Telegram Groups? Check out our detailed guide-
Bulls are now eyeing the 1.3780 level. Here the rally could pause for a break before continuing higher or retesting the 30-SMA.
Do you want to trade Forex now? Invest in eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
