Canada’s June employment report came in stronger than expected, with the economy adding 18,200 jobs versus forecasts for 10,000, while the unemployment rate unexpectedly declined to 6.5% from 6.6%. Although nearly all of the job gains came from part-time employment, the underlying details were encouraging following May’s blockbuster 87,800 increase. Average hourly earnings accelerated to 3.7% from 3.2%, private-sector employment increased by 32,000, and government payrolls fell by 31,000. The lone soft spot was manufacturing, where employment declined by 17,000 and is now down 61,000 jobs from its January 2025 peak amid tariff-related uncertainty. Overall, the report reinforces the view that Canada’s labor market remains resilient and could keep the Bank of Canada leaning in a more hawkish direction, with markets continuing to price roughly a 50% chance of a rate hike by December. The Canadian dollar strengthened modestly following the release.
From a technical perspective, USDCAD has been grinding lower this week, but the move has been anything but smooth. Each trading day has produced a lower high, keeping sellers in control, although the path lower has been filled with two-way price action. Wednesday’s break away from the converged 100- and 200-hour moving averages shifted the short-term bias more firmly to the downside, and as long as the pair remains below the 100-hour moving average (1.41846) and the 200-hour moving average (1.41937), sellers retain the edge – or at least in the game after strong gains since May 1..
That said, buyers are not out of the picture. A key support zone between 1.41297 and 1.41488 has once again attracted buying interest. Today’s low reached 1.41370, and even after the stronger Canadian jobs report, sellers could only push the pair to 1.41420 before demand resurfaced. The inability to break below support raises the possibility that a short-term floor is forming.
For sellers, a decisive break below 1.41297 would strengthen the bearish case and open the door for another leg lower. For buyers, reclaiming today’s high at 1.41740, followed by a move back above the 100- and 200-hour moving averages, would shift the near-term bias back to the upside and likely force short-covering as momentum turns in their favor.
This article was written by fl932d6e52a19643278e0f123bca7198f5 at investinglive.com.
