Canadian Employment Change is a leading indicator which provides important data about the employment market. A reading which is higher than the market forecast is bullish for the loonie.
Here are the details and 5 possible outcomes for USD/CAD.
Published on Friday at 12:30 GMT.
Indicator Background
Employment Change is one of the most important economic indicators, and this release can affect the movement of USD/CAD. It is generally released together with the Unemployment Rate.
The indicator looked terrible in April, posting a drop of – 54.5 thousand. This surprised the markets, which were expecting a gain of 6.8 thousand. The May forecast stands at 13.5 thousand. Will Employment Change bounce back and beat the estimate?
Sentiment and Levels
The employment picture in the US has brightened recently, and this is a good sign for the Canadian economy as well. In addition, the see-saw between a good jobs report in Canada and a weak one could continue, with a positive one this time. As well the price of oil supports the loonie. So, the overall sentiment is bearish on USD/CAD towards this release.
Technical levels from top to bottom: 1.0125, 1.01, 1.0050, 1.02, 1.00, 0.9950, and 99.10.
5 Scenarios
- Within expectations: 10.0K to 17.0K: In this scenario, USD/CAD could show some slight movement, but it is likely to remain within range, not breaking any levels.
- Above expectations: 17.1K to 20.0K: A reading above expectations would be a welcome sign of economic growth, and could send the pair below one support level.
- Well above expectations: Above 20.0K: A sharp rise in employment figures could trigger a rally, and two levels of support could be broken.
- Below expectations: 6.0K to 9.9K: A lower than expected reading could push the USD/CAD upward, with one resistance level at risk.
- Well below expectations: Below 6.0K: A poor reading could shake investor confidence in the Canadian economy and the USD/CAD could break two or more resistance levels.
For more on the loonie, see the USD/CAD forecast.
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