- Summary:
- The USD/CAD pair has been in a sharp downward trend in the near term. We explore what to expect ahead of the latest jobs data
The USD/CAD price declined slightly ahead of the latest Canadian jobs numbers set for later today. The pair is trading at 1.2542, which is slightly below yesterday’s high of 1.2550.
USD/CAD news: The Canadian statistics agency will publish the January jobs numbers in the afternoon session. Economists expect that the economy added more jobs in February as the country eased some of the earlier restrictions.
As such, they see they see the total unemployment rate falling to 9.2% in February from 9.5% in January. This rate is substantially higher than the US unemployment rate of 6.3%. The participation rate is expected to increase slightly from 64.7% in January to 64.9% in February. Also, the economy is expected to add more jobs in February.
These jobs numbers come a few days after the Bank of Canada (BOC) delivered its interest rate decision. The bank left interest rates unchanged at 0.25% and its quantitative easing policies intact. Still, with the economy in recovery mode, there is a high probability that the bank will start tapering the asset purchases soon.
USD/CAD technical forecast
The three-hour chart shows that the USD/CAD formed a double-top pattern at 1.2746 this month. Since then, the pair has dropped by more than 1.65%. It has also moved below the neckline of the double-top at 1.2575.
It has also moved below the 25-period and 15-period exponential moving averages (EMA). The Relative Strength Index (RSI) has also moved below the oversold level. Therefore, the pair may continue falling as bears target the next key support at 1.2500. However, an increase above 1.2575 will invalidate this trend.
USDCAD technical chart
