Canadian employment change data came in 52.1K for September. This was well above economists’ forecast of a 11.7K rise according to Forexfactory.com. This also beat the 34.3K increase in August, making this a couple of really good months for Canada’s jobs market. Unemployment rate did go up though, from 7.3% to 7.4%, a product of more people looking for jobs.
USD/CAD 4H Chart 10/5/2012 9:08AM EDT
The USD/CAD has paused after a breakdown of a channel support during the 10/4 trading session. After the positive Canadian employment change data, the CAD strengthened. Though US NFP was also positive, it only gained against the JPY. The USD/CAD continued to fall under 0.98. The September low at 0.9631 is in sight, but first a test of 0.9727, 61.8% retracement of the 0.9631-0.9883 rally.
The RSI pushed below 40 to show lost of bullish momentum, and tagged 30 to show possible return to bearish momentum.
Notice that this was also near a previous support pivot. For the next week, only a sharp push back above 0.98 invalidates this bearish outlook toward 0.9630 or lower in USD/CAD.
CAD/JPY 4HChart 10/5/2012 19:20AM EDT
The CAD/JPY also jumped sharply after the positive Canadian jobs data as seen in the 4H chart. This brings back bullish momentum after a downswing in the latter part of September.
However, it should be noted that the CAD/JPY is actually just continuing in a bullish trend since 74.42 at the end of May, beginning of June. The daily chart shows the market rallying in a rising channel, with some resistance at the 81.00 handle, near the 61.8% retracement level. A push toward 82.70-82.80, the next resistance pivot and 78.6% retracement is in sight.
CAD/JPY Daily Chart 10/5/2012 9:25AM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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