On Friday, Statistics Canada showed that labor market was surprisingly robust in May, with 77,000 jobs created, much higher than the 15,000 analysts’ forecast. For the first 5 months of year, Canada has created 185,000 full-time jobs that is well above the pace of 73,500 in 2016 and currently best year since 1999. The national unemployment rate ticked higher to 6.6%, as more people entered the job market.
Some analysts are skeptical and believe that this could be a one-off number. The drag of lower oil prices may hurt the economy over the rest of the year.
Price action on the USD/CAD daily chart shows the tentative respect of the 50-day SMA. To the downside, initial support may come from the 200-day SMA, which currently trades at the 1.3330 level. Major support may come from the 1.3290 region, it is around that area that price could form a bullish Gartley pattern. Point D is targeted with the 78.6% Fibonacci retracement of the X to A leg and the 141.4% Fibonacci expansion level of the B to C move. If we see a return of the bullish stance, key resistance will come from the 1.3450 to 1.3500 zone. If we see a major greenback recovery, major resistance will come from the 1.3800 level
The trade: Buy USD/CAD at 1.3290 with a stop loss at 1.3240 and take profit at 1.3440. The risk/reward ratio is 1:3