AUD/CAD Rallies Then Reverses on Surprise Canadian Jobs Report

The AUD/CAD pair saw a sudden reversal on Friday after an unexpected jobs report in Canada. According to the data, Canada added 75,100 jobs instead of the anticipated 17,800, while unemployment remained at 6.4%. This surprise development initially caused the Australian dollar to rise against the Canadian dollar.

However, as Christopher Lewis noted in his analysis, this was not a long-term bullish signal. The pair has been range-bound since the beginning of April and the fundamentals have not changed. In fact, Lewis mentioned that Canadian employment numbers are often wildly overstated or understated, which could lead to a reversal in the near future.

The stochastic oscillator had crossed over just days ago at an overbought condition, indicating a potential trend reversal. If momentum continues to decline, especially if oil prices rise, the AUD/CAD pair could test the 0.9750 level for support. Conversely, if oil prices collapse, the Australian dollar may continue to strengthen.