Canadian dollar heads higher

The Canadian dollar continues to gain ground on Thursday. Currently, USD/CAD is trading at 1.2877, down 0.32% on the day.

US and Canada job data ahead

It is shaping up as another strong week for the Canadian dollar, which has climbed o.90%. USD/CAD has fallen below the 1.29 level, which has held since October 2018. The US dollar continues its broad retreat, and the Canadian dollar continues to forge ahead. However, traders should keep in mind that the week is far from over, with both Canada and the US releasing key employment numbers on Friday. These releases could cause volatility and push the pair in the opposite direction, depending on how the markets react to these events.

The focus will be on job creation numbers on Friday, with analysts expecting softer numbers on both sides of the border. US nonfarm payrolls are projected to slow to 500 thousand, down from 638 thousand, while Canada Employment Change is expected to fall to a negligible 22.0 thousand, down from 83.6 thousand a month earlier. Traders should be prepared for some volatility from USD/CAD around the time of these releases (13:30 GMT).

US releases on Thursday were positive, but not enough to bolster the sagging US dollar. The weekly initial unemployment claims report showed the jobless rolls fell to 712 thousand, much lower than the previous release of 775 thousand. This marked a week low. On the services front, ISM Services PMI for November remained well into expansionary territory, as business activity remains robust. This reading was below the previous figure of 56.6, but did match the consensus estimate. Economic activity has now grown for a sixth month in a row, with readings above the 50- level, which separates expansion from contraction.

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USD/CAD Technical

• USD/CAD broke below support at 1.2885 in the European session. Below, there is a support line at 1.2798
• There is resistance at 1.3080, followed by resistance at 1.3167
• USD/CAD has moved some distance below the 10-day MA line

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