USD/CAD upbeat US NFP spikes to near two-week high, Disappointing Canadian job data

• USD/CAD captures fresh bids after upbeat US monthly employment data release.

• The US economy added 528K jobs in July and the unemployment rate fell to 3.5%.

• The dismal Canadian jobs report overshadows an uptick in oil prices and fails to benefit the loonie.

The USD/CAD pair builds on the overnight positive move and gains some follow-through traction for the second straight day on Friday. The intraday buying picks up pace in reaction to the upbeat US monthly jobs report and lifts spot prices to a nearly two-week high, closer to mid-1.2900s during the early North American session.

The headline NFP showed that the US economy added 528K jobs in July, surpassing the most optimistic estimates and market expectations for a rise of 250K. Furthermore, the previous month’s reading was also revised higher to 398K from the 372K, while the unemployment rate also surprisingly edged down to 3.5% from 3.6% in June.

Additional details revealed that average hourly earnings rose by 5.2% and pointed to further increases in inflationary pressures. The strong data revived bets for a big Fed rate hike at the September meeting and pushed US Treasury bond yields higher, which, in turn, gave the US dollar a nice boost.

In addition to this, weak Canadian employment data weighed on the domestic currency and turned out to be another factor that contributed to the sudden rise in the USD/CAD pair over the past hour or so. Statistics Canada reported that the number of people employed fell by 30.6K in July, against estimates of an additional 20,000 jobs.

The combination of aforementioned factors overshadows a modest uptick in crude oil prices, which fail to lend support to the commodity-linked loonie or hinder the USD/CAD pair’s positive move. This, in turn, supports prospects for a further intraday appreciating move, which should allow bulls to reclaim the 1.3000 psychological mark.

Technical levels to watch