The Canadian economy is expected to have lost another 50,000 jobs in March, which would be the fifth straight month. Last month saw construction jobs decline by 43,200 which may have reversed as housing starts improved to 154,700 from 136,100. Therefore, we could see a better than expected print if there weren’t losses in other sectors to offset the potential increase.
Fundamental Outlook
The Canadian economy is expected to have lost another 50,000 jobs in March, which would be the fifth straight month. Last month saw construction jobs decline by 43,200 which may have reversed as housing starts improved to 154,700 from 136,100. Therefore, we could see a better than expected print if there weren’t losses in other sectors to offset the potential increase. However, the declining U.S. and global economies have continued to sap demand for exports which could continue the trend of job losses in the goods producing sector, which shed over 130,000 employees in the past two months. The mounting job losses will continue to be a weighing factor on domestic growth which would validate the bearish Canadian dollar technical outlook. A long USD/CAD trade may be warranted with resistance possible at 1.2519 the 50-Day SMA and 1.27178 the 4/1 high.
Technical Outlook
5 waves up from 1.2197 suggest that a larger bull trend has started. The decline from 1.2720 is deep, but wave rules require that wave 2 retrace less than 100% of wave 1. Thus, as long as price is above 1.2223, I favor the upside.
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To discuss this report contact John Rivera, Currency Analyst: jrivera@fxcm.com
