USD/CAD clings to gains near 14-month tops after employment reports

The USD/CAD pair held on to its daily gains for the 11th straight session but remained capped below the 1.3800 handle following the release of employment reports from the US and Canada.

Spot failed to attract any fresh buying interest after the headline NFP print surpassed consensus estimates and came-in to show addition of 211K new jobs during the month of April. The reading was much better-than 185K expected and previous month’s dismal reading of 79K (revised lower from 98K reported earlier). 

Adding to the positive headline number, the unemployment rate unexpectedly dropped to 4.4% as against 4.6% expected and 4.5% previous, while average hourly earnings recorded in-line with estimates growth of 0.3% during the recorded period 

Meanwhile, Canadian employment details showed the number of employed people during the month of April rose by 3.2K, much lower than 10K expected but the unemployment rate surprisingly dropped to 6.5% from 6.7% in March. 

Moreover, the prevalent bearish sentiment around oil markets, with WTI crude oil dropping back to $45.00/barrel mark, failed to lend any additional support to the commodity-linked currency - Loonie, and but did little to trigger any fresh bullish momentum as market seemed to await for the upcoming speeches from various FOMC officials, including the Fed Chair Janet Yellen, which should provide fresh impetus for the pair's movement later during the NY trading session.

Technical levels to watch

Immediate support is pegged near mid-1.3700s, below which the pair is likely to correct further towards the 1.3700 handle en-route 1.3655-50 horizontal support.

On the flip side, a follow through buying interest beyond the 1.3800 handle should pave way for continuation of the pair’s strong bullish momentum further towards 1.3840-45 intermediate resistance ahead of 1.3880 resistance.