Category: Forex News

USD/CAD forecast after the US and Canada jobs reports

By Published On: April 11, 20242.2 min readViews: 2830 Comments on USD/CAD forecast after the US and Canada jobs reports

2024-04-05 08:32:37 ET

The USD/CAD exchange rate rose for the second straight day after the latest US and Canadian jobs numbers. It rose to a high of 1.3580 on Friday, higher than this week’s low of 1.3477.

US and Canada jobs numbers

The USD/CAD pair has been quite volatile this week as traders reflected on the statement by Federal Reserve officials, including Jerome Powell. Other officials who talked were Mary Daly, Loretta Mester, and Raphael Bostic.

The pair also reacted to the strong manufacturing numbers from the US. In a report on Monday, the Institute of Supply Management (ISM) said that the manufacturing PMI rose to 52.2 in March, the first time that it grew since 2022.

The most important economic data came out on Friday when the US and Canada published their March jobs reports.

In a statement, the Bureau of Labor Statistics (BLS) said that the

economy added

303k jobs in March. It also downgraded the previous month’s numbers from 275k to 270k.

Further data revealed that the unemployment rate improved to 3.8%. Wage growth remained strong as it expanded by 4.1% during the month.

These numbers imply that the labor market is still strong despite the recent layoffs by companies like Apple, Meta, and Disney. As such, there is a likelihood that the Federal Reserve will hold steady for at least two more meetings.

Meanwhile, in Canada, the unemployment rate rose from 5.8% in February to 6.1% in March. That happened as the country shed 2.2k jobs after adding 40.7k in the previous month.

There is a likelihood that the Bank of Canada will deliver its rate cut earlier than the Federal Reserve since inflation is falling at a faster pace. The headline Consumer Price Index (CPI) fell to 2.8% in February, down from 8.1% in June 2021.

USD/CAD technical analysis

USD/CAD


USD/CAD chart by TradingView

The daily chart reveals that the USD to CAD exchange rate dropped to a low of 1.3477 on Thursday and then rebounded to a high of 1.3580. Its lowest point was notable since it was along the lower side of the ascending channel shown in black.

The pair has remained above the 50-day Exponential Moving Average (EMA), which is a bullish sign. It also formed a hammer pattern, which is a sign of a positive sign. Therefore, the outlook for the pair is bullish, with the next point to watch being to 1.3635, the upper side of the channel and its highest swing on November 3rd last year.

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USD/CAD forecast after the US and Canada jobs reports

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