Global market overview for 12/06/2017:
The Canadian job market delivered very good data for the last month. The Canadian employment increased 54k in May compared with an expected increase of around 11k for the month and following a 3,2k increase for the previous month. Full-time employment increased by 77k in May and overall there was an annual increase of 1.5% in full-time jobs in the year-to-date period. On the other hand, the part-time employment declined 22,3k jobs in May, but there is still a 3.2% increase over the year. The unemployment rate increased from 6.5% to 6.6% which was in line with consensus forecasts. The participation rate increased from 65.6% to 65.8% for the month. In his Financial Stability Review, Bank of Canada Governor Stephen Poloz said, that he remains optimistic about the Canadian economic growth even with the recent slide in the price of the crude oil. The employment data should enhance his optimism even more, especially as the full-time employment is surging (which might indicate a higher earnings). This means there is a potential monetary policy tightening on the horizon for the Bank of Canada, but market participants must wait until 12 of July to find out. Nevertheless, even after the FED interest rate hike, which is mostly priced in, the Canadian Dollar should slowly appreciate in time.
Let's now take a look at the USD/CAD technical picture on the H4 time frame. The price got stuck in a tight range between two important levels: technical support at the level of 1.3387 and technical resistance at the level of 1.3540. Moreover, as the price is trading below 200-period moving average, the outlook remains bearish until FED interest rate decision this Wednesday.
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