USD/CAD sits firm in the key 1.2450 resistance post US and Canadian jobs data

• USD/CAD holds in the 1.2450s following a positive outcome for both the US Nonfarm Payrolls and Canadian jobs data. 
• Technically, the pair is attempting a test of critical resistance and is bound by the 1.2420s and 1.2480s.

 USD/CAD is on the back foot again following the US Nonfarm Payrolls beat as the US dollar extends the day's highs, according to the DXY index which measures the greenback vs a basket of rival currencies. At the time of writing and shortly after the release of the US jobs data, USD/CAD has been forced to test the prior day's close after sliding from the day's high of 1.2479 to a current low of 1.2444 leaving the pair flat on the day so far.

US September Nonfarm Payrolls arrived as +531K vs. the expected +425K. Meanwhile, the Canadian jobs market data has also been released. The nation's October Employment Change arrived at 31.2K versus a 42K estimate which likely leaves pressures to the upside for the pair at the end of the week. However, the Unemployment Rate fell by 0.2 percentage points to 6.7%, albeit, the Participation Rate arrived at 65.3% versus 65.5% last month. 

BoC hawkishness supports the loonie

Nevertheless, in a hawkish shift, and supportive of the loonie, the Bank of Canada has decided to end its QE asset purchases immediately and has brought forward its guidance on the first-rate hike to mid-2022. In contrast, the Federal Reserve has been less forthcoming and with the Canadian economy growing strongly, creating jobs and experiencing more sustained inflation, there is the real prospect of 100bp of rate hikes next year, which bods well for the Canadian dollar, leading the way in the commodity-fx sphere.

USD/CAD technical analysis

USD/CAD, however, has been in a phase of accumulation since mid-October, yet is now facing a wall of daily resistance, so it could be subject to a meanwhile correction back into a familiar liquidity area:

A rejection at this juncture opens risk towards the 1.2420s and the hourly 50-EMA as illustrated above, prior to the next upside attempt to break the 1.2480s and beyond 1.25 the figure.