USDCAD dropped after hitting the 1.3800 weekly high last week, falling almost 2.50%. (Pivot Orderbook analysis)

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• USDCAD dropped after hitting the 1.3800 weekly high last week, falling almost 2.50%.
• The Canadian employment data crushed estimates while adding to inflationary pressures due to wages reaching the 5.55% threshold.
• The US jobs data was mixed, though a higher unemployment rate could deter the Federal Reserve from hiking aggressively.

The pair currently trades last at 1.3505.

The previous day high was 1.3752 while the previous day low was 1.3469. The daily 38.2% Fib levels comes at 1.3577, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3644, expected to provide resistance.

The USDCAD extends its losses to two-consecutive days, testing the 50-day Exponential Moving Average (EMA) amidst an upbeat market sentiment, as the United States mid-term elections and the US Consumer Price Index (CPI) grab the spotlight. Hence the American Dollar is falling, and the Loonie is capitalizing on it. At the time of writing, the USDCAD is trading at 1.3510, down by 0.22%.

The October US employment report was mixed, with investors focusing not on the headline figure, which showed that 261K new jobs were added to the economy, but on the Unemployment Rate, which edged higher, towards 3.7%, above the 3.6% estimates and also September’s 3.5%. Also, Average Hourly Earnings compared to the last month’s eased from 5% to 4.7% YoY, so the last couple of figures augmented investors’ speculation that the Federal Reserve would slow down its’s pace of tightening, as they expressed on its last monetary policy meeting, while also commenting that the peak of rates would be higher than September’s projections.

On the Canadian side, October’s data crushed expectations for a 10K print, with the economy adding a staggering 108K jobs. Meanwhile, the six-month trend for job creation sits at +9K, which according to TD Securities Analysts, “Is consistent with GDP growth in the mi-1s.” Regarding wages, the Average Hourly Wagest jumped by 5.5%, YoY, above 5.2% of the previous month, as it would add further pressure on the Bank of Canada (BoC) to keep tightening.

Elsewhere, the US Dollar Index, which tracks the buck’s value against six currencies, drops 0.34%., at 110.404, a headwind for the USDCAD. It should be noted that the Loonie is taking advantage of a weaker US Dollar, as oil prices are sliding as China’s backpedaled against easing Covid-19 restrictions, which would delay economic recovery and might affect the black gold prices.

Later in the day, Fed speakers, with the Cleveland Fed President Loretta Mester and Boston’s Fed President Susan Collins, would cross newswires.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.3505 at the time of writing. Pair opened at 1.3479 and is trading with a change of 0.19 % .

The pair is trading below its 20 Daily moving average @ 1.3694, above its 50 Daily moving average @ 1.3495 , above its 100 Daily moving average @ 1.3205 and above its 200 Daily moving average @ 1.2961

The previous day high was 1.3752 while the previous day low was 1.3469. The daily 38.2% Fib levels comes at 1.3577, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3644, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3381, 1.3284, 1.3098
• Pivot resistance is noted at 1.3664, 1.3849, 1.3947

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