A block of labor market statistics is coming out in Canada today. Net Change in Employment, Unemployment Rate and Participation Rate are due to be published.
Lately, Canadian economy was doing poorly amid financial markets turbulence and falling commodities prices. During the first quarter of the year, the GDP was declining. Falling oil prices also affected the labor market. The number of oil pumps was shrinking, which raised unemployment to 6.8% as oil exports make up a big chunk of country’s exports.
Labor market data for June was expected to confirm the negative trend in the economy. The number of employed may shrink by further 10 K, and unemployment level can reach 6.9%.
It is worth noting that this release is going to be the last publication of important data before the Bank of Canada meeting, which is due next week. Probably, yearly economy growth figure is going to be revised which will further add to the pressure on the CAD. There may also be a decision on interest rates change, however, rather unlikely.
Another important piece of news today is the Fed Chair Janet Yellen speech. Investors, as always, are going to be looking for hints on approximate date of interest rates hike.
Fundamental factors suggest that the USD is going to continue strengthening against the CAD. Therefore, long positions are preferred. These can be opened after the breakout of the level of 1.2715 with targets at 1.2760, 1.2820, and stop-loss at 1.2650. Should the actual unemployment level figure come out better than its forecast, short positions can be opened from 1.2675 with the target at 1.2615 and stop-loss at 1.2700.