USD/CAD downside picks up ahead of today’s Canada Jobs data
The headline Canada jobs print is expected to see a net negative change of 5,000. The October data was strong with a blockbuster 66.6k jobs added, led by part-time workers. This number, and the September figure of 60.4k, helped offset most of the losses seen in July and August. Those two most recent data points appear inconsistent with a wide range of labour market measures that continue to show weakness. The jobless rate fell to 6.9% from 7.1%. US tariffs have hit economic growth this year.
CAD has been helped by several factors in recent weeks. Improved risk appetite, even if background concerns remain, firmer crude prices and also rising copper prices have helped. The latter may give Canadian terms of trade a modest, and CAD-supportive, tailwind. US/Canada interest rate spreads have narrowed additionally boosting the loonie.  The flip side is the rate cutting Fed, and near-term a potentially sharp adverse dollar reaction should the central bank decide to hold next week. A double top reversal pattern from the November highs sees a measured move down to around 1.3840. But the 200-day SMA is nearer at 1.3910, with the 100-day at 1.3900. That is also around the bottom of the ascending channel from the June lows. Above, is the 50-day SMA at 1.4009 and a major Fib level (38.2%) of this year’s downtrend at 1.4017.
AUD/USD strong bullish momentum
Even after disappointing GDP earlier this week, it seems the RBA is not near cutting rates again since the recent hotter than expected inflation data. That’s according to domestic investment banks who expect the RBA to be on hold for an extended period of time/foreseeable future. But some economists do think rate setters may continue to cut rates, touting May and August as still possible dates next year. The bulls have helped the aussie surge ten days in the last eleven and above the 50-day and 100-day SMAs. The major has actually been rangebound for some months between the lows 0.64s (the midpoint of the September 2024 to April 2025 move) and around 0.66. The 200-day SMA has acted as support, now at 0.6470. The shorter-term SMAs sit at 0.6532/35 with the September high just above 0.67 getting closer after this recent bull move.
DOW breakout soon?
The Dow Jones sell-off in mid-November has nearly been erased, after prices hit the minor Fib retracement level (23.6%) of the April to November rally at 45,641. Also adding support was the 100-day SMA, now at 45,968. The bounce back has been solid with cyclicals and healthcare still strong and boosting the Dow, which is less tech weighted. Prices paused for breath in recent days before a textbook bullish consolidation (flag) pattern. It seems a move to the upside could be on the cards as buyers look to the record top at 48.431. Support below the breakout level could come at the 50-day SMA at 46,860.