The USD/CAD closed lower during last week’s trading session with the Canadian currency seeing strength after data from the purchasing managers and Labor sectors shows that there is improvement in the Canadian economy. On Thursday February 6, IVEY PMI, a leading indicator of economic health which measures the level of a diffusion index based on surveyed purchasing managers was published and saw an improving figure of 56.8 which shows there is expansion currently in the Canadian economy. Economist had expected figures to be 51.3 but the reports missed expectation and saw far better outcome.
Furthermore, on Friday February 7, the Labor department of the country also published employment statistics data which shows that more jobs were created in the previous month, though at a medium pace. Economist had expected 19.7k jobs would be created but reports came out as 29.4k. Unemployment rate also fell from 7.1% to 7.0%, an indication that there’s an improvement in the economy.
Technically, weekly bias on the pair remains on the downside in the medium term, after the pair broke 1.10364 support, the previous week’s lowest to make a new low at 1.09671 but later saw a decent pull back to retest 1.10364 which now acts as a resistance. With 55EMA, RSI, MACD and Stochastic all pointing for a further decline on the 4hours charts, a clear break of 1.09671 would resume further decline of the pair to 1.08350 (61.8% Fib ratio from price 1.05877 to 1.12226).
However, a clear break of 1.11207 resistance would nullify the current medium downtrend and resume the overall bullish run in the larger picture. Further demand to retest 1.12226 could be seen.