USD/CAD spikes above 1.34 after US and Canada labour market data

• Unemployment in Canada stays unchanged at 5.8% as expected.
• NFP in the U.S: increases by 196K in March.
• US Dollar Index rises to daily highs near 97.40.

The USD/CAD pair jumped to a weekly high of 1.3402 with the initial market reaction to employment data released from Canada and the United States. As of writing, the pair is trading at 1.3380, adding 0.17% on a daily basis.

Statistics Canada on Friday reported that the unemployment rate in Canada stayed unchanged at 5.8% in March as expected. However, the net change in employment came in at -7.2K to miss the market expectation of 1K and weighed on the loonie.

On the other hand, the U.S. Bureau of Labor Statistics said that the total nonfarm employment increased by 196K in March following February's 20K reading and beat the analysts' estimate of 180K. Other details of the report revealed that wage inflation, as measured by the average hourly earnings, rose 0.1% in March vs 0.3% expected that the labour force participation rate edged down to 63% from 63.2% in February. Boosted by the strong NFP figure, the US Dollar Index rose to 97.40 but failed to preserve its momentum amid the soft wage inflation.  As of writing, the index is unchanged on the day at 97.30.

There won't be any macroeconomic data releases in the remainder of the day and the USD's market valuation is likely to remain as the primary driver of the pair's price action.

Technical levels to consider

The pair could face the immediate resistance at 1.3400 (daily high) ahead of 1.3450 (Mar. 28 high) and 1.3500 (psychological level). On the downside, supports are located at 1.3350 (daily low), 1.3310 (50-DMA) and 1.3215 (200-DMA).