USD/CAD Recover from One-Week Low as Key US and Canadian Jobs Report Looms
The USD/CAD pair recovers from a one-week low, restoring the 1.4300 level as downward bearish Crude Oil prices pressure the Canadian Dollar (CAD) as major employment reports loom from the US and Canada. This is the pair’s first positive action in three days, spurred by repositioning trades and market expectations of the US Nonfarm Payrolls (NFP) release. Nevertheless, a persistent US Dollar (USD) selling bias, spurred by Trump trade tariffs concerns and expected Federal Reserve (Fed) rate cuts, restricts further rallies. In turn, Trump’s short-term tariff reprieves for Canada and Mexico alleviate trade tensions, possibly supporting the CAD and capping USD/CAD’s upside. Traders now await job data releases for clearer directional cues. KEY LOOKOUTS • The pair recovers above 1.4300, snapping a three-day losing streak as traders reposition ahead of key US and Canadian employment data. • Bearish crude oil prices weaken the Canadian Dollar, acting as a tailwind for USD/CAD, but potential BoC policy decisions could cap gains. • Ongoing USD selling, fueled by fears of Trump’s trade tariffs and potential Fed rate cuts, keeps the pair’s bullish momentum in check. • The US Nonfarm Payrolls and Canada’s employment report will be major drivers, dictating the near-term price action and investor sentiment in USD/CAD. The USD/CAD pair recovers from a one-week low, rising back above 1.4300, as the market players reposition prior to the US Nonfarm Payrolls (NFP) data and Canada’s employment numbers. Poor Crude Oil prices are still depressing the Canadian Dollar (CAD), supporting the pair slightly, but the hopes that the Bank of Canada (BoC) will soon halt rate cuts could cap the pair’s upside. At the same time, a persistent US Dollar (USD) selling bias, driven by Trump’s trade tariffs and uncertainty regarding possible Federal Reserve (Fed) rate reductions, contributes to the uncertainty. With market actors waiting for new employment statistics, the short-term prospects for USD/CAD continue to be reliant on economic releases and general risk sentiment. The USD/CAD currency pair bounces higher around 1.4300 due to poor Crude Oil prices and repositioning for major US and Canadian jobs data. Yet, the USD selling bias due to Trump’s trade policy and possible Fed rate cuts might cap higher gains. Sellers now look to NFP and Canada’s employment report for more direction. • USD/CAD rallies from a week low, ending a three-day losing streak due to market repositioning. • Bearish crude oil prices weigh on the Canadian Dollar, aiding USD/CAD’s upside. • Fears of Trump’s trade tariffs and possible Fed rate cuts constrain the US Dollar’s strength. • Speculation that the Bank of Canada might leave rates unchanged might cap USD/CAD’s advances. • Traders wait for the NFP report, which will be important in forming USD price action. • Canadian employment numbers will offer additional guidance for the pair’s direction. • Trump’s exemption of Canadian and Mexican imports from tariffs for one month mitigates fears of trade wars, weakly bolstering the CAD. The USD/CAD pair continues to be under spotlight as the release of US and Canadian employment reports is awaited by traders with anticipation. The releases will offer major indications of both economies’ health and might sway monetary policy moves in the future. Market participants are also intently observing the global economic landscape, especially economic policies and trade relations, which have a significant influence on the sentiment of investors. With evolving trade agreements and central banks monitoring economic stability, traders are aligning themselves depending on possible changes in policy and economic outlook. USD/CAD Daily Price Chart Chart Source: TradingView Another significant determinant of market sentiment is the effect of crude oil prices on the Canadian economy. Being an oil-exporting country, Canada’s economic performance is directly related to the movement in oil demand and supply. Furthermore, recent trade policy developments, such as temporary tariff relief on Canadian and Mexican products, are being watched for their long-term effects on trade relations and economic growth. As investors wait for major employment figures, sentiment is still cautious, and future direction will be based on general economic data and geopolitical events. TECHNICAL ANALYSIS USD/CAD pair has rebounded from a one-and-a-half-week low around the 1.4240-1.4235 area, retaking the 1.4300 level. This bounce indicates a possible short-term support area around 1.4240, and the 1.4350-1.4380 area could be the next resistance point. Despite this, the pair is still at risk of negative moves in a persistent bear trend in the US Dollar (USD). Should bearish selling intensify, breaking below 1.4240 may pave the way for continued losses to 1.4200 or worse. Meanwhile, momentum oscillators such as the Relative Strength Index (RSI) and Moving Averages provide a neutral to slightly bearish inclination, with market participants holding out for vital employment releases to confirm directional themes. FORECAST If the US employment figures beat expectations and favor the US Dollar (USD), the USD/CAD pair may pick up more steam. A move above the 1.4350 resistance level can take the pair to the 1.4380-1.4400 region, where more bullish momentum can be initiated. Additionally, if crude oil prices keep falling, the Canadian Dollar (CAD) can weaken, further favoring an up move in USD/CAD. A hawkish policy from the Federal Reserve (Fed) or rising market risk aversion would also propel the pair higher as investors turn to safe-haven assets. Conversely, softer US job data or economic slowdown signals would trigger a fresh USD sell-off, sending USD/CAD back towards the 1.4240 support area. Should this level be broken, the next key support is around 1.4200, which would leave the door open for further declines. Also, if the Bank of Canada (BoC) is to indicate a more stable or hawkish monetary policy, this might make the CAD stronger, capping gains for USD/CAD. Reversal of crude oil price also might lend some support to the Canadian Dollar, making it more likely that the pair could drop.