USDCAD is one of the FX pairs that will be more active today. November’s jobs reports from both the United States and Canada will be released today at 1:30 pm GMT. Report from the US will, as usual, be more closely watched by market participants as it may cement expectations ahead of the upcoming FOMC meeting on December 15, 2021. Continued, strong recovery on the labour market could make Fed shift its focus back to inflation and decide on quicker policy tightening by accelerating the pace of QE tapering. This in turn would pave the way for earlier rate hikes next year. Report from Canada is not expected to have as big an impact on the near-term policy moves of the Bank of Canada. However, it usually triggers some more volatile moves around the announcement hour. Market expectations:
- Non-farm payrolls. Expected: 550k. Previous: 604k
- Unemployment rate. Expected: 4.5%. Previous: 4.6%
- Wage growth. Expected: 5.0% YoY. Previous: 4.9% YoY
- Employment. Expected: 39.8k. Previous: 31.2k
- Unemployment rate. Expected: 6.6%. Previous: 6.7%
A look at the USDCAD chart at a daily interval shows us that the pair has reached an important mid-term resistance zone this week. The price zone ranging around 1.2825 has been tested a few times this year but the pair failed to deliver a bigger and more sustained break every time. Strong NFP report would boost odds for quicker policy tightening and would be supportive for US dollar. Data release at 1:30 pm GMT could therefore be crucial for whether the pair makes or breaks it. In case we see a break above the 1.2825 resistance, the next resistance to watch can be found at the 38.2% retracement of the downward move started in March 2020 (1.3020).