The USDCAD experienced a significant drop after the release of stronger-than-expected Canadian jobs data. The employment numbers showed an increase of 60.4K jobs, surpassing the expected 5K, with the unemployment rate remaining steady at 7.1%. The labor market data revealed a notable surge of 106.1K full-time jobs, but a decline of 45.6K part-time positions.
From a technical standpoint, the pair plummeted from 1.4014 to 1.3975, bringing attention to the ascending 100-hour moving average at 1.39668 and the swing highs around 1.3970. A persistent break below this support zone would pave the way for the 200-hour MA at 1.39544 and the 200-day MA at 1.3952.
Traders are closely monitoring this area with stops placed beneath it. This level serves as a crucial technical indicator for both buyers and sellers.
Interestingly, the market's anticipation of a Bank of Canada (BOC) interest rate cut has decreased to 57% at the upcoming meeting, down from 70% prior to the jobs report release.
But here's where it gets controversial: Some analysts argue that the stronger jobs report could lead to a more hawkish stance from the BOC, potentially delaying any rate cuts. Others believe that the labor market improvement might not be enough to offset the economic downturn caused by the pandemic.
So, what do you think? Will the BOC cut interest rates at the next meeting, or will the stronger jobs report change their minds? Share your thoughts in the comments below.
