Last Friday, Canada saw a huge increase in the number of jobs added with a gain of 157K new jobs and only 59.5K were expected this month. In the US, only 194K were added with the expectation of 490K. Although NFP missed, the US still saw a fall in unemployment rate which made investor sentiment mixed.
This news has probably turned the pair bearish with a favorable loonie over the USD. There is still too much uncertainty in the US that has turned this pair volatile over jobs news. However, the USD is usually stronger in these types of scenarios, and the DXY (dollar index) had the opposite behavior on the 1D chart as price rose to a 2 year high. With this kind of uncertainty, this sell off might be setting us up for a decent long entry on this USDCAD pair.
USD falls on weakness against the loonie after good jobs numbers in Canada and mixed sentiment in the USD. The pair is currently on support around 1.24444 once it broke under a rising trend line on the 1D chart. Price crossed under its 200 DMA as well which could prove to be bearish this week. We are looking at price on clean support, so a break under would cause more momentum to the downside, and a bounce could lead to a test around 1.25452.
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