USD/CAD drops below 1.2800 despite dismal Canadian jobs report

• Unemployment Rate in Canada jumped to 9.4% in January.
• Nonfarm Payrolls in the US increased by 49K in January.
• USD/CAD trades in the negative territory near 1.2800.

The USD/CAD pair spiked to a session high of 1.2828 with the initial market reaction to the labour market reports from the US and Canada but quickly changed its direction. As of writing, the pair was down 0.22% on a daily basis at 1.2797.

USD selloff picks up steam after NFP data

The data published by Statistics Canada showed on Friday that the Unemployment Rate in Canada jumped to 9.4% in January from 8.8% in December with the Net Change in Employment slumping to -212,800.

However, this disappointing reading failed to provide a boost to USD/CAD as the greenback came under strong selling pressure after January Nonfarm Payrolls (NFP) report painted a mixed picture.

The NFP in January rose by 49,000 and came in slightly weaker than the market expectation of 50,000. On a negative noted, December's print of -140,000 got revised down to -227,000 and weighed on the USD. The US Dollar Index (DXY), which spent the first half of the day a little below 91.50, dropped to a daily low of 91.17 before recovering modestly. At the moment, the DXY is losing 0.26% on the day at 91.30. 

Meanwhile, the underlying details of the US jobs report showed that the Unemployment Rate improved to 6.3% from 6.7% but this print by itself doesn't seem to be helping the buck regather its strength.

Technical levels to watch for