Today, the focus of investors will be on the US Department of Labor report with monthly data on the labor market, which will be published at 12:30 (we already wrote about this in the previous review S&P500: on the eve of the publication of NFP). Also at the same time, Statistics Canada will publish data on the country’s labor market for July. Unemployment has risen in Canada in recent months, including against the backdrop of massive business closures due to the coronavirus and layoffs. Unemployment rose from the usual 5.6% – 5.7% to 7.8% in March and already to 13.7% in May 2020. If unemployment continues to rise, the Canadian dollar will decline. If the data turns out to be better than the previous value, then the Canadian dollar will strengthen. Decreasing unemployment rate is a positive factor for CAD, rising unemployment is a negative factor.
Unemployment is expected to rise to 5.1% in July (previous value of 4.9%). The deterioration of the situation on the labor market will significantly exacerbate the Bank of Canada’s problem of curbing rising inflation while the labor market and the country’s economy are slowing down.
From a technical point of view, USD/CAD is in the bull market zone, above the key support levels 1.2850, 1.2785, 1.2755 (for more details, see USD/CAD: technical analysis and trading recommendations for 08/05/2022).
Today’s publication at 12:30 (GMT) may become a driver for further growth, if the data for the US turns out to be positive, and for Canada it is negative.
The breakdown of the local resistance level of 1.2890 will be a confirmation signal for new long positions in USD/CAD.
Support levels: 1.2870, 1.2857, 1.2845, 1.2800, 1.2785, 1.2755, 1.2740, 1.2700, 1.2550, 1.2520
Resistance levels: 1.2890, 1.2960, 1.3000, 1.3070, 1.3100, 1.3223
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