Initial fall reversed

The Canada employment report came in a little better than expected at 26.2K jobs vs 14.0K.

The initial reaction was to the downside with the price moving to 1.2939, but there has been a snap back rally that has now taken the price above the 200 hour MA at the 1.2983 level. It has also moved above the 50% of the move down from the Sept 1 high to the low on September 7th.. That also comes in at 1.2983. As a result, the technical picture is more bullish as a result with the next target at the 200 bar MA on the 4 hour chart at 1.3005 and the 1.3022 level (61.8% of the move down - see chart above).

The report was better than expected but the USDCAD has moved higher (CAD lower). What gives?

AS Adam points out, the CAD could not rally after a 4% gain in oil yesterday. Today, crude oil is back down -2.35%. Also the two month numbers are still little changed with declines in full time employment. Perhaps that is the focus in addition to the better technicals. Nevertheless, the first reaction, may give way so traders will be careful. Watch that 200 hour MA/50% level and on the other side, traders who are long, will like to see the next target above taken out. So far, the support at the 1.2983 is holding on the correction.

Taking a broader look at the pair. the daily chart earlier this week held support against trend line support. Today, the price has moved back above the 100 day MA a thte 1.29458 level. The pair has been consolidating in a triangle with increasingly narrow ranges. The topside trend line comes in at 1.3120 area. That is outside the likely trading for today, but if the price can hold support, a move back up toward that target might be in the cards for next week.