Canada’s latest jobs report surpassed expectations, with employment increasing by 53,600 and the unemployment rate dropping sharply from 7.0% to 6.5%. However, the labour force participation rate declined slightly to 65.1% from 65.3%, which likely contributed to the decrease in unemployment. Notably, for the second consecutive month, employment gains were primarily in part-time roles, rising by 63,000 after an 85,100 increase last month.

The Canadian dollar (CAD) has strengthened against the US dollar (USDCAD has fallen), as markets factor in the possibility of an interest rate hike in 2026. On the hourly chart, several technical indicators have converged in the 1.3886 to 1.3901 range. These include the 100-day and 200-day moving averages and the 61.8% Fibonacci retracement of the rally from mid-September’s low. Currently, the price has dipped just below these levels to a low of 1.38846, but only by a pip or two.

This zone is crucial for both buyers and sellers. Traders need to watch whether sellers can maintain momentum or if dip buyers will step in with tight stops to defend the level. For buyers to gain confidence, the price would need to close above the higher 100-day moving average, potentially sparking a corrective rally towards the 1.3923 to 1.3935 range.

Conversely, if the price breaks decisively below this support area, it could trigger further downside momentum.

Key level to watch: 1.3886 to 1.3901 area.

Original Source: Greg Michalowski of investinglive.com