USD broadly weaker after "goldilocks" US jobs report. USDCAD breaks support. US CPI and Retail Sales in focus this week
  • USDCAD: Dollar/CAD is starting the week with a quiet tone after Fridays push lower following the employment reports from the US and Canada. The slightly weaker than expected Canadian report (+15.4k vs +21k) was largely shrugged off and the US report was deemed by markets to a be goldilocks result (better than expected headline job gains but weaker than expected wage growth...not too cold, not too hot), but traders seemed to focus on the softer wage growth as an excuse to sell the USD more broadly. EURUSD spiked higher. The USDCAD broke support at 1.2850 and then plunged lower. The market made an attempt to regain the support level it broke but it failed going into the NY close, leaving the market a little vulnerable now to start the week last night. A slight bid has come into USDCAD here though as EURUSD and GBPUSD reverse lower on the day, but the next chart support level is not until the 1.2770s. Its going to be a quieter week for US and Canadian data, with the focus being US CPI tomorrow and US Retail Sales on Wednesday. Central bank speak will be light too with just the Bank of Canadas Stephen Poloz speaking tomorrow (Topic: Todays Labour Market and the Future of Work) and theyll be no Fed speakers are theyre now in their blackout period ahead of the next FOMC meeting (March 21). With no data on the calendar today, we think USDCAD follows the broader USD theme today. If EURUSD makes a run at Fridays lows, we would not be surprised to see USDCAD move higher here. Resistance at 1.2850-75 needs to be taken out, however, for upward momentum to return in any meaningful way in our opinion.

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Erik Bregar - Director, FX Trading
Exchange Bank of Canada
Toronto, Ontario

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