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USD/CAD trims losses but holds under 1.2800

  • Loonie up across the board on upbeat Canadian jobs reports.
  • USD strengthened trimming losses vs CAD.
  • Pair on a bearish corrective mode after another rejection from above 1.2900

The USD/CAD pair moved off lows during the last hours, on the back of a stronger US dollar. The loonie is still sharply higher across the board.

CAD up after jobs, despite USD strength

USD/CAD plummeted after the release of US and Canadian jobs report. NFP rose at a solid rate but below expectations while in Canada employment increased above expectations (35K vs 15K) and full-time jobs advanced by 88.000.

The pair tumbled from 1.2825 to 1.2712, reaching the lowest level since October 25. From the lows it bounced to the upside after the greenback gained momentum following the factory orders and ISM non-manufacturing reports.

The recovery of USD/CAD found resistance at 1.2775/80 and at the moment it trades at 1.2770, down 35 pips for the day. The CAD, among majors, it the best performer of the day so far.

Technical outlook

The pair still holds a bullish tone in daily and weekly charts. In the short-term the failure at 1.2900 opened the doors for the current correction. To the downside, support might lie at 1.2710 (Nov 3 low), 1.2650 (20-day moving average), 1.2600 and 1.2410 (Jul low).

To the upside, resistance levels might lie at 1.2795 (Nov 2 low), 1.2835 (Nov 3 high) and 1.2865. The area around 1.2900 continues to be a critical level: a significant close above would open the doors to more gains.

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