USDCAD trades up and down but keeps bearish bias after strong jobs report

Stronger employment report favors the CAD.

The Canada employment report came in much stronger than expectations and that has helped to push the USDCAD to the lowest level going back to February 25. The pair is also trying to get and stay below the 1.25195 level. That represents a swing area going back to February 25 ahead of the extreme low on that day at 1.24673 (see green numbered circles). 

Stronger employment report favors the CAD.

The low price from yesterday stalled at that level and saw the price rebound in the Asian and early European session today. However, that rally stalled at the broken 61.8% retracement level at 1.2573 (see red numbered circles). The level also corresponded with the swing low from March 4 near that level.  

The move back down has been helped by the jobs report although the price action is a bit choppy with a downward bias.  However, the sellers do remain in control.

This week (and going back to February 26), the price action in the pair had mostly traded between 1.2586 and 1.2697 (see red box in the chart above).  There were a couple failed breaks above the higher extreme, and another below the lower extreme (see red shaded areas), but most of the up and down trading was in that red box  

Yesterday, traders took the pair outside the box. If the price can remain below going forward, the sellers remain in control. Move back above, and we could see a snap back rally in the pair. 

The low for the year at 1.24673 represents the recent cycle low going back to February 2018. The low for that year reached 1.22455. The low in 2017 reached 1.20612.  On a break to the downside, those levels become longer-term targets.

USDCAD on the daily chart

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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