The Canadian dollar dropped to new lows against the greenback and got close to the critical resistance level of 1.1278 – the peak seen in March. Beyond this level, we are back to the highs seen in July 2009.
The high so far is 1.1270, but after the pair retreated, a big breakout might have to wait for next week as trading volumes are dwindling down. But a last minute can also happen.
On the way up, USD/CAD broke above the previous 2014 peak of 1.1225 and left it well behind.
The trigger was the excellent Non-Farm Payrolls report. The US gained 248K jobs and nice revisions added to the mix. The headline of an unemployment rate of only 5.9% was certainly good news for the US as well, even if it came on the background of a drop in the participation rate. Canada publishes its jobs report next week.
In Canada, the trade balance totally disappointed, as the nation recorded a deficit of 0.6 billion instead of a surplus of 1.5 billion expected. In the previous month, Canada enjoyed a surplus of 2.2 billion. The US trade balance stood on 40.1 billion USD, and that was better than expected.
Here is how the move looks on the chart:
