USD/CAD Remains Pressured Below Key 1.21 Level Ahead of NFP Data

2 min read
01 Jun, 21
Written by Clover4X

 

 

Article Highlights:
  • USD/CAD consolidated near a 3-year bottom below 1.21
  • Key US jobs report on Friday to renew volatility in the pair

USD/CAD Hits Rock Bottom

The USD/CAD pair still struggles to gain upside traction as US dollar bulls are faced with continued resistance that has been keeping a lid on the pair since early May. Throughout the month, the USD/CAD exchange rate has been trading in a consolidation zone between 1.2000 and 1.2150. A monthly high was registered on May 13 when the pair was lifted to 1.2202, while the lowest point arrived on May 18, when the rate slipped to 1.2012.

The pair has been rangebound in a 3-year low and has faltered after a few attempts to break over the key 1.21 resistance. Yesterday, the USD/CAD traded in an even tighter range due to US traders sitting out as the markets were closed in observance of Memorial Day.

On the first trading session of June, the pair remains tilted to the downside with an opening price of 1.2062 and a current market price of 1.2040. The quiet hover near relatively unchanged levels is defined by lack of key drivers from both the US and Canada as market participants are anticipating new events to stir the currency market.

US Data Expectations

Traders and investors have already priced in previous developments, such as higher US inflation for April that has so far depreciated the greenback. However, economic data further in the week is poised to create heightened volatility in the USD/CAD, and the currency market in general.

The US non-farm payroll report scheduled for Friday will reveal how much the US economy advanced in May in terms of new jobs created. The release of the news is bound to have a significant immediate impact on the USD/CAD, even more so, with the employment change for the Canadian economy released at the same hour, 08:30 am EST.

The US economy, for the month of April, delivered a disappointing report of 266,000 new hirings. Economists expected the labor market to grow by nearly 1 million new jobs added. In Canada, employment fell by 207,000 (-1.1%) in April, while unemployment rate rose 0.6% to 8.1%. In addition to the news expected on Friday, the US will also release its unemployment rate, which currently stands at 6.1%.

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