When is the Canadian jobs report and how could it affect USD/CAD?

Canadian employment details overview

Statistics Canada is scheduled to publish the monthly jobs report for September later this Friday at 12:30 GMT. Despite signs of an economic slowdown, the Canadian economy is expected to have added 60,000 jobs during the reported month. This, however, marks a notable deceleration from 90,200 reported in the previous month, though might be enough to push the unemployment rate lower from 7.1% to 6.9% in September.

Analysts at CIBC offered their take on the upcoming Canadian employment data and explained: “Back to school likely meant back to work for many Canadian parents. With institutions across the country returning to in person learning this September, more parents were probably able to join the workforce. The reintroduction of in-class education also likely meant more support workers were needed at those places. But the return of school isn’t the only reason we’re forecasting another solid gain in employment of 70K.”

How could the data affect USD/CAD?

Ahead of the key release, bullish crude oil prices continued underpinning the commodity-linked loonie and dragged the USD/CAD pair to multi-week lows. A stronger report should provide an additional boost to the Canadian dollar and set the stage for additional losses for the major. Conversely, a weaker print might be enough to prompt some short-covering move around the major.

That said, the immediate market reaction is likely to be overshadowed by the simultaneous release of the closely-watched US jobs data. The popularly known NFP report will determine the Fed's next policy move and influence the near-term USD price dynamics, which, in turn, should provide a fresh directional impetus to the major.

From a technical perspective, the pair, so far, has managed to hold its neck above the very important 200-day SMA, around the 1.2515-20 region. This is closely followed by the key 1.2500 psychological mark, which if broken decisively will be seen as a fresh trigger for bearish traders. The pair might then accelerate the fall towards intermediate support near the 1.2435 area before eventually dropping to the 1.2400 round figure.

On the flip side, any meaningful recovery is likely to confront resistance near the 1.2600 mark. This is followed by weekly swing highs, around the 1.2645-50 region, above which a bout of short-covering has the potential to lift the pair back towards the 1.2700 mark. The momentum could further get extended towards the next relevant hurdle near the 1.2760 horizontal zone.

Key Notes

  •   Canadian Jobs Preview: Three reasons why this publication provides a straightforward trading opportunity

  •   Canadian Jobs Preview: Forecasts from five major banks, extending recovery yet uncertainty looms

  •   USD/CAD hangs near multi-week lows, focus remains on US/Canadian jobs report

About the Employment Change

The employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive, or bullish for the CAD, while a low reading is seen as negative or bearish.

About the Unemployment Rate

The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to weaken the Canadian economy. Normally, a decrease of the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.