• The Canadian economy added double of the jobs foreseen by economists, while the unemployment rate fell below 6%.
• The US Nonfarm Payrolls disappointed, but the Unemployment Rate dipped under 4%.
• USD/CAD Technical Outlook: A break under 1.2700 opens the door for a fall towards 1.2642.

The USD/CAD is extending its fall to two consecutive days in the week, briefly pierced the 50-day moving average (DMA) around 1.2687, to then reclaim the 1.2700 figure after Canadian and US employment data struck the wires. At the time of writing, it is trading at 1.2686.

Canadian jobs report overshadowed US Nonfarm Payrolls

The Canadian economy docket featured the employment report for December 2021. Statistics Canada said that the country added 54,700 jobs to the economy, doubling analysts’ estimations for a 27,500 gain. Additionally, the Unemployment Rate fell from 6.0% t0 5.9%.

The dip in the jobless rate is the lowest seen since February 2020, before Covid-19 emerged. After December’s report, Canada’s labor market is up 240,500 jobs above the pre-pandemic level. However, it is worth noting that the poll was done between December 5 and December 11, pre-Omicron outbreak in the country. Analysts expect a weaker January 2022 report on the latter mentioned.

At the same time, the US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls rose by 199,000, worse than the 400,000 foreseen by economists. The positive of the employment report is that Unemployment Rate in the US dipped under the 4% threshold, at 3.9%, lower than the estimated 4.1%.

In the meantime, US Treasury yields fell some, after reaching a daily high of around 1.771%, retreated four basis points down to 1.741%. The US Dollar Index, briefly pierced under 96.00 at press time, sits at 96.03.

USD/CAD Price Forecast: Technical outlook

The USD/CAD 1-hour chart depicts the pair as downward biased after breaching the 50, 100, and 200-hour simple moving averages (SMAs), leaving them residing above the spot price. Additionally, the pierce of the 1.2700 threshold opened the door for a further dip towards the S1 daily pivot level at 1.2684. A break of that level would expose the January 4 daily low at 1.2667, followed by the S2 daily pivot at 1.2642.