The greenback gained against the Canadian Dollar, upon the release of weaker than expected employment data. The reading for the Canadian Employment Change for March came out at 17.9k, down from a reading of 20.9k from the previous month, and short of analysts' expectations, who were looking for a number around 25.9k. After the breaking of the news, the pair took a hike to as high as 1.0080 from trading near parity only minutes before.

Despite missing expectations, it must be noted that it is indeed a positive number and shows gradual recovery in the Canadian Jobs market, and could very well be thought of as a temporary setback amongst the many better than expected numbers that have been coming out on Canada for several weeks now. Furthermore, there is always the chance that investors were running ahead of themselves and speculating for a much better number than the consensus actually showed. If this is the case, then the initial reaction could be explained as securing some of the profits, and the recent sell off of the Canadian Dollar could be short lived.

Fundamentally, this should ease the concerns for the Canadian Central Bank to raise interest rates, since lower employment levels could be interpreted as lower inflation pressures. Markets are pricing in an increase in Canadian interest rats by July this year, as an initial phase. With the release of the news, derivative indicators which are guided by market expectations, now showed a smaller probability for a rate hike in July. Consequently, a looser monetary policy could have some negative impact on the Canadian Dollar.

Technically, the downward trend of the last few days in USDCAD has not been breached. Below the 1.0120 level we should see healthy bids into the Canadian Dollar. A break above that could lead to a short run reversal of the trend and open the way for the 1.0300 resistance level to be tested.