Canada’s dollar is poised to advance to the strongest in three months after the country created nearly twice as many jobs as forecast in March, according to technical analysis by JPMorgan Chase & Co.
The currency may gain to C$1.0645 per U.S. dollar, a level last seen on Jan. 6, if it strengthens past the boundary of a support zone at C$1.0906, said Niall O’Connor, a technical analyst in New York at JPMorgan. It entered the zone April 4 by appreciating beyond C$1.0985 after Canada reported employers added 42,900 jobs in March, versus a forecast of 22,500 in a Bloomberg economist survey. The zone includes the February strong point of C$1.0911.
“If you break the low end of that range, then there’s a shift,” O’Connor, who wrote a client note on the subject today, said by phone from New York. “Short-term, if you do break those levels, it’s enough to suggest CAD has room to extend.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, gained 0.1 percent to C$1.0971 per U.S. dollar at 12:14 p.m. in Toronto. It closed April 4 at C$1.0981 after reaching C$1.0957, the strongest since March 6.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Support is a level where buy orders, in this case for the U.S. dollar, may be clustered.