The Canadian dollar moved lower last week, as risk off on Friday, and worse than expected employment data, put pressure on the Loon. The Bank of Canada has moved from tightening mode, just 6 months ago to easing mode, and is likely going to reverse the 25 basis point tightening in the central bank meetings to come.
On Friday while all eyes were focused on Greece and the US payroll report, Canada experience a very disappointing jobs report.Canada had its worst month for jobs since 2009 as the economy unexpectedly shed 54,000 jobs last month, pushing the unemployment rate to 7.3 percent from 7.1 percent.
Statistics Canada reported Friday that after strong job creation in September, the economy gave most of those jobs back in October, shedding 71,700 full time jobs. The result means that for the last four months, new employment in Canada has basically been stagnant.
The softening news on jobs pushed the Canadian dollar to resistance levels against the greenback and could potentially see further selling if resistance is broken. With the 10-day moving average seemingly solid support, traders are likely to test the recent highs near 1.0270.
The trade – purchase a daily binary call on USD/CAD on a close above 1.0280.
Signal Summary
Asset : USD/CAD
The trade : Binary Call Option
Expiry time : End of day
When : On a daily close above 1.0280.
Result : Out of the money
