The Canadian Loonie lifted together with its Commodity counterparts, the Aussie and Kiwi on the upbeat mood which saw risk assets rise. USD/CAD slumped to 1.39532 overnight low before climbing to settle at 1.3982 at the New York close (1.4145 yesterday). Despite a dip in crude oil prices, WTI down 2.13% to US$24.50 (US$25.10) and a dire Canadian IVEY PMI report to the biggest total fall on record, USD/CAD fell on broad-based Dollar selling.
Canada’s Employment report which is also scheduled for release at the same time as that of its US counterpart is forecast to see a horrendous Jobs loss of 4.125 million in April from March’s -1.010 million. The Jobless rate is expected to climb to 20% from 7.8%. That is huge in the context of the size of the Canadian economy compared to the US. That said, with both numbers expected to be horrible, the focus will fall on the bigger US Payrolls. Still any rise much worse than the numbers forecast, given the unprecedented fall in Canada’s Ivey PMI’s, the Loonie could suffer.
USD/CAD has immediate support at 1.3950 followed by 1.3910. Immediate resistance can be found at 1.4010, 1.4060, and 1.4100. Expect a trading range between 1.3950 and 1.4150 ahead of the numbers. After that, we could see a wild roller coaster ride where the 1.3900-1.4200 six-week range could be hit on both sides. Let’s get ready to rumble!