Canada’s September employment report was weaker than expected, with employment falling 68,300 versus expectations for a 9,200 increase. That follows a 41,700 decline in August, bringing the combined job losses over the two months to 110,000.
The weakness extended across both full-time and part-time employment:
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Full-time employment: Down 35,400.
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Part-time employment: Down 32,900.
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Unemployment rate: Rose to 6.5%, matching expectations.
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Participation rate: Fell to 64.8%.
The decline in participation is worth watching. Fewer people participating in the labour market can limit the rise in the unemployment rate, even as employment falls.
See Adam’s review of the data HERE.
USDCAD jumps, but buyers struggle to hold the break
The initial reaction sent the USDCAD sharply higher as the Canadian dollar weakened. The move took the price above this week’s previous high at 1.42928. That level also aligns with the 61.8% retracement of the decline from the February 2025 high to the late-January 2026 low.
Today’s high reached 1.4298, but the price has since slipped back below that key hurdle and is trading near 1.4280.
Buyers had their shot to break higher. So far, they have been unable to sustain it. That is a red flag, particularly with the employment data giving them a fundamental reason to push the pair higher.
What levels matter now?
The broken trendline connecting this week’s highs comes in near 1.4269. That provides a close risk-defining level for buyers looking for another push higher.
Stay above it, and the pullback can remain a correction within the move higher. Buyers would then need to reclaim 1.42928 and stay above it to open the door for further upside.
Move below 1.4269, however, and the failed break could encourage further liquidation toward:
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100-hour moving average: 1.42415.
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200-hour moving average: 1.4232.
Those moving averages are the next important support targets. A break below both would shift the technical bias more firmly back in favor of the sellers.
The question now is straightforward: Is this just a short-term pullback before buyers make another run higher, or is the failure to hold above 1.42928 the start of a deeper reversal?
Let the price action tell the story. The trendline at 1.4269 is the nearby barometer. The 1.42928 level remains the hurdle buyers need to clear—and hold.
In the video above, I explain the technicals in more detail. If you find it helpful, please give it a thumbs up and subscribe toInvestingLive on YouTube.
This article was written by Greg Michalowski at investinglive.com.