Change in employment of 78.6K and 79.5K in back to back months helps to send the loonie higher (USDCAD lower).
Forget about the US jobs for a moment, the Canada employment report rocked. Back to back increases of 79K have sent the USDCAD tumbling lower. The price moved from about 1.2512 to a low of 1.2366.
Technically, the pair has moved below the October low at 1.24313 (see chart above) and the July 2017 swing low at 1.24114. The 61.8% at 1.2389 was also breached. Those levels are now resistance levels on rallies. I would not expect the yellow area to be broken on any corrective action. That is the ceiling/risk for shorts now.
The downside? We trade in the lower area from 2017. That bottomed at 1.20612. If the BOC is on a tightening bias, that is not out of the question. Looking at the 4-hour chart, the 1.2340 area was home to swing level going back to September (see yellow area in the chart below). That may stall some of the selling on a test today (with stops below).
