USD/CAD drops to fresh 3-month lows, around 1.3400 mark post-US/Canadian jobs report
- USD/CAD remained depressed through the early North American session on Friday.
- Stellar NFP report lifted the USD, albeit did little to provide any respite to the pair.
- Rallying oil prices, upbeat Canadian jobs report continued benefitting the loonie.
The USD/CAD pair dropped to fresh three-month lows in the last hour, with bears now looking to extend the downfall further below the 1.3400 mark.
The US dollar built on its intraday recovery move and attract some follow-through buying interest despite much better-than-expected US monthly jobs report. The headline NFP print showed that the US economy unexpectedly added around 2.50 million jobs in May, surpassing even the most optimistic estimates.
Adding to this, the unemployment rate fell to 13.3% during the reported month as against 14.7% previous and consensus estimates pointing to a big jump to 19.8%. The data added to the recent optimism over a sharp V-shaped economic recovery and reinforced expectations that the worst of the coronavirus pandemic was over.
On the other hand, the commodity-linked currency – the loonie – remained well supported by a strong intraday rally in crude oil prices. This coupled with stronger-than-anticipated domestic employment details provided an additional boost to the Canadian dollar and helped offset a modest pickup in the USD demand.
The pair extended its downfall further below the very important 200-day SMA and now seems to have filled a big bullish gap recorded in early March. A subsequent fall below the 1.3400 mark will confirm a near-term bearish breakdown and set the stage for a further near-term appreciating move.
Technical levels to watch