(This is an excerpt from an article I originally published on Seeking Alpha on May 12, 2015. Click here to read the entire piece.)
The Canadian jobs report is often overlooked thanks to the bigger headlines on the U.S. jobs report that precedes it. The Canadian dollar (FXC) strengthened marginally in response to the combination of reports and today is following through on this strength. The ability for the currency to trade below the presumed secondary trading channel signals to me confirmation of my earlier thesis on accumulating the Canadian dollar here.
Source: FreeStockCharts.com
The headline number for Canadian jobs was a decline of 20,000. However, this net result hid a jump in full-time employment of 47,000. The unemployment rate held steady at 6.8% for a third month in a row. This flattening seems to end the rapid improvement seen in late 2014.
Source: Statistics Canada
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Source: Oanda’s CFTC COmmitment of Traders
Assuming that oil prices are indeed stabilizing, Canada’s natural resources sector could start to see improvements later in the year. The Canadian dollar should continue to strengthen in anticipation of such positive changes.
Be careful out there!
Full disclosure: long FXC
(This is an excerpt from an article I originally published on Seeking Alpha on May 12, 2015. Click here to read the entire piece.)