Solid News

Canadian Labor Market Continues to Recover

8/26/2022 1:39 PM

The Canadian currency is trying to win back losses against the US dollar against the backdrop of positive macroeconomic statistics from the national labor market. Now the USD/CAD pair is correcting downwards, trading around 1.2954.

As Statistics Canada reported yesterday, employment in the service sector rose by 0.6% in June, and almost all areas showed positive dynamics: education, the indicator added 1.9%, food – 1.3%, and healthcare – by 0.4 %. During this period, the total number of vacancies increased by 3.2%, which means the appearance for the third consecutive month of more than 1.0M additional unfilled positions and, as a result, an increase in demand for labor by 1.4% compared to May of this year – to 17.7M. The most demanded are still specialists in the healthcare sector, where the rate of posted vacancies rose by 40.8% YoY and by 0.2% MoM. These data indicate that the Canadian labor market is starting to grow rapidly, which will undoubtedly positively impact the national economy.

The US dollar continues its strong momentum and is trading around 108.500 in the USD Index, having almost no reaction to the data on US gross domestic product (GDP) in the second quarter, according to which the economy slowed down by 0.6%. Possibly, the market's poor reaction is related to data on the labor market, where the number of Initial Jobless Claims fell to 243.0K from 245.0K a week earlier.

On the daily chart of the asset, the trading instrument is moving within a wide ascending channel with dynamic boundaries of 1.2600–1.3200 towards the support line. Indicator Alligator's EMA oscillation range began to narrow, and the histogram of the AO oscillator is forming downward bars in the buying zone.

Resistance levels: 1.2990, 1.3222. | Support levels: 1.2893, 1.2727.

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