Canadian employment report expected to note a significant bounce-back in the upcoming week

The employment report failed to bear good news for the Canadian economy in November. Statistics Canada had announced a massive drop of 71K in employment in November that shook the analysts and investors alike. With the employment report for December set to be revealed in the upcoming week, all eyes are set on it in order to get a better insight into the intent of the USD/CAD currency pair.

Employment Is Expected To Bound-Back By 32K In December

According to the analysts at CIBC, December’s employment report barely has a chance to extend the decline of November. Experts are anticipating a significant bounce-back in the December’s employment report. In terms of figure, the consensus is currently capped at 32K while CIBC analysts are expecting a much lower 10K of rebound in last month’s employment report.

The analysts further added that while a rebound is expected in the Canadian employment figure later in the week, the economy is likely to take its time to recover the entire loss that it printed in November. It was also commented that owing to upbeat employment figures noted earlier in 2019, the overall employment growth for the year looks reasonable when compared to the rather weak gains that the economy recorded in terms of GDP.

If the data highlights modest growth in employment, the Canadian unemployment rate will remain unchanged at 5.9% that was posted in November. The figure marks a 15-month high for the Canadian economy. The analysts also accentuated that 2019 saw significant growth in population. Employment readings, on the other hand, have remained stagnant that hint at the rising difficulty for Canadians to find work consequently leading to widening jobless rate.

Employment Report Is Likely To Be The Major Market Mover For USD/CAD

In an event that the data shows a weak rebound, analysts remarked, the prospect of a rate cut to further boost the economy will remain in sight. In any case, it is given that the Canadian employment report is going to cast a significant effect on the forex market.

At the time of writing, 1.3000 marks a strong resistance for the USD/CAD currency pair. While the pair did break above the resistance towards the end of last week, the gain was seen unsustainable as the pair dropped back to around 1.2980 level. The pair closed the last week at 1.2997. On the downside, the pair has found support around 1.2980 level. A daily close above 1.3000 level will turn it into strong support for USD/CAD.