The pick of the day is Loonie, forex geek name for the Canadian dollar as we are expecting the Canadian jobs report and their unemployment rate to be released on Friday at 1:30 PM GMT.
Previously on Canadian Dollar…
June’s unemployment was bad. It showed 9.4K drop in hiring versus the estimated 20.7K increase. That obviously took its toll on Mr. Canadian dollar against his major counterparts. USD/CAD itself jumped 60 pips right after the release. The pair has since been on an up-move being lead by the US dollar, breaking above the Ichimoku cloud, going back to the 1.09 level.
For the month of July, Canada’s jobs sector is expected to get back on its feet and print a rebound of 25.4K in employment. This should be enough to bring the jobless rate back down from 7.1% to 7.0%.
But keeping in mind that the Canadian employment change figure has missed the mark in three out of the last five months, there’s a good chance of seeing another disappointing result this time.
As we learned at the Invest Diva education program, a better than expected unemployment rate is good for Mr. Canadian dollar and a weaker than expected figures often times leads to a Loonie selloff.
If we look at USD/CAD, the would mean more up-moves for the pair. (Find out why.)
The pair wasn’t able to break below the 38% Fibonacci level in July and instead has broken above the Ichimoku cloud with the RSI well-directed around the over-bought zone. After a period of uptrend dating back to September 2012 the pair currently seems to be dancing within a falling channel. A break above the upper band of the channel at the 1.094 resistance level could open doors for more gains in the Loonie with targets set at a previous tops at 1.117 and 1.127 in extension.
Alternatively if the pair breaks below the 38% Fibonacci level at 1.064, we could expect the falling channel to get stronger with bearish targets set at 1.045 and 1.025 in extension.