Employment in Canada show a good signs of growth

The Canadian dollar has weakened to its lowest level since August, pressured by the rapid strengthening of the U.S. dollar. Investors and analysts continue to predict that the Federal Reserve will delay cutting interest rates longer than previously expected, as the U.S. economy remains robust. Additionally, higher-than-expected inflation reflects the ongoing strength of both household and business sectors, despite high interest rates.

The resilience of Canada’s labor market has reduced expectations that the Bank of Canada will cut its policy rate by 50 basis points this month. A stronger-than-expected employment report has tempered such predictions. However, there are still forecasts that the Bank of Canada will lower the rate by 25 basis points on October 23, in line with its stance over the past three meetings.

In September, Canada’s unemployment rate decreased to 6.5%, down from 6.6% in the previous month. This is the first decline in unemployment since January, easing concerns about a weakening labor market that policymakers at the Bank of Canada had expressed significant worry about. The number of unemployed individuals dropped by 30,800 from the previous month to 1,428,100, with a notable decline in youth unemployment to 13.5%.

Meanwhile, Canada added 46,700 jobs, marking the highest increase in five months, driven primarily by full-time employment, while part-time employment dropped by over 65,300 positions. However, wage growth remains modest, as companies continue to cut costs to maintain financial liquidity and reduce production expenses.

Canada reported a trade deficit of CAD 1.10 billion in August, marking the sixth consecutive month of deficit. The decline was driven by a 1.0% drop in exports, down to CAD 64.3 billion, with energy product shipments decreasing by 3.0%, including a 4.1% reduction in crude oil exports. Meanwhile, imports rose slightly by 0.3% to CAD 65.4 billion, reflecting increased purchases of automotive components and machinery in the manufacturing sector.

Techical analysis data (5H)

Resistance: 1.3787, 1.3816, 1.3847

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.3696 - 1.3727 but cannot break the support at 1.3727, you may set a TP at approximately 1.3816 and SL at around 1.3668 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.3787 - 1.3816, you may set a TP at approximately 1.3847 and SL at around 1.3696 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.3787 - 1.3816 but cannot break the resistance at 1.3696, you may set a TP at approximately 1.3787 and SL at around 1.3847 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.3696 - 1.3727, you may set a TP at approximately 1.3668 and SL at around 1.3816 or according to your acceptable risk.

Pivot point October 12, 2024 08:20 PM. GMT+7