By Ketki Saxena
Investing.com -- The Canadian dollar gained against its US counterpart today, as positive economic data and a rebound of risk-on sentiment supported the loonie.
The Canadian jobs report came in well above expectations, showing a gain of 63.8K jobs against the forecast 20K, well above last month’s gain of 39.9K.
The unemployment rate also came in more positive than had been expected.
US non farm payrolls meanwhile proved a mixed bag. While nonfarm payrolls came in strong, hourly wages and the unemployment rate came in below expectations.
The mixed data helped spur risk-on sentiment that sent equities higher and the DXY to print a weekly low.
On a technical level for the pair, analysts at FX Street note, “Despite Friday’s reprieve, the USD/CAD remains firmly bullish on the charts, trading well above the 200-day SMA near 1.3450 and the 50-day SMA confirming a bullish cross of the longer moving average.”
“The Relative Strength Index (RSI) has pulled back from overbought conditions on the daily chart, and USD/CAD short interest will want a bearish confirmation before following the indicator lower.”
Up next for the pair, further impetus will be provided by a data-heavy week in the US, which will include the release of CPI, the October University of Michigan sentiment data and inflation expectations, and the Fed’s release of meeting minutes from September.
The week will also feature a slew of Fed speakers.
Analysts at Scotiabank (TSX:BNS) note, “The concentration of price data in the US next week might open the door for some further, modest improvement in the CAD”, particularly if US CPI shows a moderation. "
“If US CPI data next week cools a bit, or even a bit more than expected, the USD could slip back. The more so as the Canadian jobs report clearly reflected the ongoing tightness in the labour market."