USD/CAD jumps above 1.31 following US and Canada employment data

• Unemployment in Canada ticked up to 5.5% in June.
• Nonfarm payrolls in the US increased 224K vs 160K expected.
• US Dollar Index rose to fresh 2-week highs above 97.

The USD/CAD pair gained nearly 70 pips in a matter of minutes following the employment data releases from Canada and the United States to touch its highest level of the day at 1.3128. As of writing, the pair was up 0.5% on a daily basis at 1.3115.

The data published by Statistics Canada today revealed that the unemployment rate in Canada rose to 5.5% in June amid a 2,200 decrease in the number of employed and weighed on the loonie. 

On the other hand, the U.S. Bureau of Labor Statistics reported that nonfarm payrolls in the U.S. increased by 224,000 in June to surpass the market expectation of 160,000 by a wide margin. The press release also showed that the wage inflation, as measured by the average hourly earnings, stayed unchanged at 3.1%. 

With the knee-jerk reaction to the upbeat NFP data, the US Dollar Index rose to its highest level in two weeks at 97.24. At the moment, the index is up 0.45% on the day at 97.15.

Later in the session, the Ivey PMI data from Canada will be looked upon for fresh impetus but is unlikely to allow the CAD to make a strong recovery against the buck.

Technical levels to consider