USD/CAD is nearing a retest of the May trendline
Strong Canadian jobs data and an unexpected trade surplus sent the Canadian dollar to the top of the currency leaderboard today. The market is still sorting through the numbers along with US jobs and trade but the main details of the Canadian data are impressive. The 81,300 full time jobs created were the most since 2011.
Digging into the details of the Canadian jobs number, there isn't any real caveat. The jobs were nicely balanced, although heavily tilted to the service sector.
USD/CAD hit a three-week low of 1.3180 in the aftermath of the data but it's also being pulled higher by broad US dollar buying in the aftermath of the non-farm payrolls report.
Technically, the pair is nearing an inflection point. The trendline since May is under threat. It was hit last month but was followed by an aggressive rally higher.
It will be interesting to hear upcoming commentary from the Bank of Canada. There is nothing on the schedule but Poloz is known to pop up in the press from time to time. If he shifts to something openly hawkish, CAD could really go on a run.
