The USDCAD dropped 60 pips to the Daily Chart 100 Moving Average for the first time in six weeks on Friday afternoon. The Canadian Dollar strengthens, boosted by rising Crude Oil prices and positive Canadian data.
2 December, AtoZForex – Although, the NFP figures came in slightly better than expected, 177k expected versus the 178k result, USDCAD dropped to a 1.3254 session low. This is the lowest price has traded since October 21. What can we expect if the Canadian Dollar strengthens further?
|Non Farm Payroll Data||Monthly Average Hourly Earnings|
|Market Expectation||172,000||Market Expectation||0.2%|
Despite a slightly better NFP data, the monthly Average Hourly Earnings came out worse than expected at -0.1%. This is the worst Average Hourly Earnings release since September 2016.
Canadian Dollar Strengthens as Bears take charge Short-Term
On the daily chart, we can see that the price has moved within an ascending channel. A break below the channel could mean more selling pressure for USDCAD. The session low at 1.3250 is also a key level as break below, and price could to drop to 1.3000 (October 2016 low).
|Canada Employment Change||Canada Unemployment Rate|
|Market Expectation||-16,500||Market Expectation||7%|
Apart from a better than expected data, the Canadian Dollar strengthens also as an OPEC agreement was reached earlier this week for Crude Oil production Cut. On Wednesday, November 30, OPEC member nations, led by Saudi Arabia and Iran pledged a deal. The OPEC agreement was to cut 1.2 million barrels of crude Oil per day. Crude Oil price appreciated over 400 pips (50.28) as the deal was reached. The Canadian Dollar surged due to its close correlation with crude oil and if Crude Oil hits 60$ as some analysts believe, the USDCAD will dip further.
What To Expect if the Canadian Dollar Strengthens Further.
We might expect the price of USDCAD to fall towards the 200 EMA at 1.3164. A break below of that level could expose October 2016 lows at 1.3000.
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