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Today’s Trading Edge: USD/CAD loonie maintains momentum following Friday’s job beat

Posted by WorldWideMarkets . on Jun 11, 2017 9:49:29 PM

WWM USDCAD JUN 11 2017.jpg

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

Topics: USDCAD, Cad

 

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