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USD/CAD Stabilizes at 1.3730 as Markets Await Canadian Jobs Report and Fed Rate Cut Speculation

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  • August 8, 2025
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USD/CAD is stable around 1.3730 in anticipation of Canada’s July jobs report, with investors preparing for a possible hike in the unemployment rate to 7% and weaker job growth versus May. The pair continues to trade range-bound as the US Dollar falters with increasing expectations that the Federal Reserve will reduce interest rates in September, pushing the greenback to trade just off a one-week low. The focus now shifts towards the labor market data, which may dictate the Bank of Canada’s monetary policy perspective and decide the direction of the pair’s next move. KEY LOOKOUTS •  July’s employment report is supposed to reflect weaker job growth of 13.5K compared to 83.1K in May, as unemployment increases to 7%. •  Markets are factoring in a highly probable September rate cut, which is driving down the US Dollar. •  Support at 1.3880 is critical, while a fall below 1.3540 will set the stage for additional weakness towards 1.3500 and 1.3420. •  Labor market outcomes may affect the Bank of Canada’s position on subsequent interest rate moves. USD/CAD is stabilizing around 1.3730 with traders waiting for Canada’s July jobs report, which is likely to post softer job growth and an increase in the unemployment rate to 7%. The US Dollar continues to struggle, with investors nearly fully factoring in a Federal Reserve September rate cut, leaving the greenback close to recent lows. Technical indicators suggest a sideways trend with the 20-day EMA as support and the 14-day RSI trading at around 50. The impending labor market release will be crucial in determining expectations regarding the Bank of Canada policy course and may determine the pair’s next breakout direction. USD/CAD is stable at 1.3730 as the markets are waiting for Canada’s July employment data, which is expected to reveal slower employment and increased joblessness. Fed rate cut expectations still pressure the US Dollar, and the pair remains in a narrow channel. • USD/CAD remains flat at 1.3730 in anticipation of Canadian July job data. • Markets anticipate job growth would slow to 13.5K from 83.1K last May. • Canadian unemployment rate to increase to 7% from 6.9%. • Fed rate reduction in September still highly expected, bearing down on the US Dollar. • US Dollar Index trading close to a week’s low of 98.00. • Stronger technical support at 1.3540; stronger resistance at 1.3880 and 1.4000. • Outcome of labor data can have an effect on the monetary policy stance of the Bank of Canada. The USD/CAD currency pair remains steady as investors wait for Canada’s July employment report to be released, which is likely to reflect on slowing hiring and a slight increase in the unemployment rate to 7%. Economists are predicting that the Canadian economy created only 13.5K jobs in July, down sharply from the 83.1K in May. The information will be carefully monitored for its effects on the wellbeing of the labor market as well as its possible impact on Bank of Canada’s future policy. USD/CAD DAILY PRICE CHART SOURCE: TradingView In the meantime, the US Dollar is under pressure as more and more investors are betting on a September Federal Reserve rate cut. Market sentiment has been influenced by the possibility of a weaker US economic outlook, coupled with news reports that Fed Governor Christopher Waller might take over Jerome Powell’s Fed Chair position. All this has made traders keep their guard up, while market attention is squarely on the Canadian jobs report for new signals on USD/CAD’s direction. TECHNICAL ANALYSIS USD/CAD is at its 20-day Exponential Moving Average (EMA) at approximately 1.3730, a state of consolidation. The 14-day Relative Strength Index (RSI) is around the neutrality level of 50, an indicator that there is no dominance in either direction. A solid breakout over the August 1 high of 1.3880 might open the door to the May 15 high at 1.4000 and the April 9 low at 1.4075. On the other hand, a fall below the June 16 low of 1.3540 would set the stage for further losses towards the major psychological level of 1.3500 and September 25 low of 1.3420. FORECAST Should Canada’s July job data be weaker than anticipated, it might pressure the Canadian Dollar and drive USD/CAD upward. A breach above the resistance of 1.3880 would most probably pave the way towards the May 15 high at 1.4000, with additional upside towards 1.4075 if bearish pressure gathers momentum. Ongoing US Dollar weakness might be in check with robust US data or bullish Fed rhetoric, which may catalyze the pair’s rally. Conversely, even better-than-anticipated Canadian labor market data may lift the Loonie and pull USD/CAD down. Breaking the June 16 low of 1.3540 would presumably lead to a test of the psychological 1.3500 level, with potential extension towards the September 25 low of 1.3420. Any indication of growing Canadian economic resilience and ongoing Fed rate cut speculation may encourage bearish pressure on the pair.

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Commodities Oil – US Crude

USD/CAD Forecast: Bullish Bias Remains Above 1.3700 as Price Looks to Breakout from Bearish Channel

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  • July 16, 2025
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USD/CAD currency pair remains trading with a bullish bias above the 1.3700 level, underpinned by robust short-term momentum and a bullish technical configuration. Even as it consolidated inside a downtrend channel, the pair has been showing strength for the fourth session in succession, supported by the 14-day RSI remaining above the 50 level and price action still above the nine-day EMA. The short-term attention remains on the important resistance at the 50-day EMA around 1.3748, which if broken, can see a rally to the May high of 1.4016. Yet a breakdown of above short-term support at 1.3688 could leave the pair vulnerable to further losses towards multi-month bottoms. KEY LOOKOUTS • Look for a possible breakout above the 50-day EMA, which could pave the way for additional upside towards the 1.4016 level. • A breakdown below the nine-day EMA might undermine the short-term bullish momentum and cause a pullback towards June’s low of 1.3539. • The 14-day Relative Strength Index remaining above the middle-level 50 point signals sustained bullish inclination in the short term. • Watch price action near the top level of the declining channel at 1.3750 for hints on potential trend reversal or continuation. USD/CAD pair continues its rising trend, trading consistently above the level of 1.3700 in renewed bullish momentum. Although ranged within a falling channel, the pair’s strength is underpinned by the 14-day RSI remaining above 50 and price action above the nine-day EMA indicating short-term bullish potential. Principal resistance is now at the 50-day EMA around 1.3748, which is also the top of the channel. A clear break above this level may speed gains to the May high of 1.4016, with a failure to hold above 1.3688 likely to tempt bearish pressure. USD/CAD remains firm above 1.3700, with a bullish RSI and short-term moving averages giving it a supportive base. A breakout above 1.3748 may set the stage for more gains, with support at 1.3688 still pivotal. The pair remains within a falling channel, prompting traders to remain on guard. • USD/CAD is trading above 1.3700, its fourth day of consecutive gains. • The pair is still in a downtrending channel, which suggests continued consolidation. • The 14-day RSI is north of the 50 level, which is bullish in the short term. • The first resistance is at the 50-day EMA at 1.3748, which coincides with the top of the channel. • A break through 1.3748 may take the pair to the May high of 1.4016. • Key support is at the nine-day EMA of 1.3688; a break could prompt a decline to 1.3539. • Additional declines could reach multi-month lows at 1.3419 and the channel base at 1.3340. The USD/CAD currency pair has provided steadfast strength over recent trading sessions, an indication of restored investor faith in the US Dollar as global market dynamics shift. Economic announcements, interest rate forecasts, and geopolitical news have all played a part in the pair’s direction. Market participants are keeping a close eye on the overall macroeconomic context, particularly with regard to oil prices and North American trade flows, which in the past have influenced the Canadian Dollar’s performance. USD/CAD DAILY PRICE CHART SOURCE: TradingView Besides, market sentiment is also sensitive to major Federal Reserve and Bank of Canada announcements. The divergences in monetary policy directions between the two central banks usually create volatility for the USD/CAD currency pair. Since both economies are working their way through inflationary pressures and growth expectations, the pair tends to be quite active owing to fundamental changes and investor positioning. TECHNICAL ANALYSIS USD/CAD is now moving within a falling channel, indicating a larger consolidation period. Yet, the pair has a bullish bias in the short term, as it is above the nine-day Exponential Moving Average (EMA) and the 14-day Relative Strength Index (RSI) is above the 50 mark. The nearest resistance comes at the 50-day EMA of 1.3748, which happens to be the upper line of the channel. A successful breakout above this zone could signal a shift in medium-term momentum, while failure to do so may keep the pair confined within its current range. FORECAST If USD/CAD can break through the pivotal resistance at the 50-day EMA around 1.3748 and the top of the falling channel, a more powerful bull trend could be triggered. Such a breach would enhance medium-term sentiment and potentially set the stage for a run toward the May high of 1.4016. Persistent buying interest above that level could also propel the pair into higher resistance levels, underpinned by positive momentum indicators. Conversely, a failure to stay above the near-term support at the nine-day EMA of 1.3688 may trigger fresh selling pressure. A fall below this level might expose the pair to further downward moves towards the June low of 1.3539. Fresh bearish pressure might send USD/CAD even lower towards 1.3419, which is the lowest print since February, with subsequent possible testing of the down channel’s lower border around 1.3340.

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Currencies

USD/CAD Approaches 1.3800 Due to Diplomatic Market Sentiment and Expectation of Fed Interest Rate Decision

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  • May 7, 2025
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USD/CAD currency pair has risen towards 1.3800 since investors take a conservative approach following the Federal Reserve’s expected interest rate decision. Although the Fed is likely to leave rates unchanged, market focus is on comments by Chair Jerome Powell in light of existing trade tensions and political pressure from President Trump. The Canadian Dollar (CAD) is encountering some headwinds even as risk sentiment has improved in the wake of a joint press conference between Canadian Prime Minister Mark Carney and US President Donald Trump. Nonetheless, concerns about Canada’s domestic economic data, such as a sharp decline in the Ivey PMI, are dragging the CAD down. In the meantime, senior-level negotiations between US and Chinese officials will be held in Geneva, further complicating global trade dynamics. KEY LOOKOUTS • Market participants will be watching closely for the Fed’s interest rate move and Chair Jerome Powell’s remarks, especially on possible future rate cuts and the economic effects of continued trade tensions. • The result of US-Canada trade talks, particularly after the joint press conference between President Trump and Prime Minister Carney, will be instrumental for the CAD. Any news on tariffs or trade deals could have a strong impact on the pair. • The high-level meeting between US Treasury Secretary Bessent, Trade Representative Greer, and Chinese Vice Premier He Lifeng in the coming days may shift global trade sentiment, impacting the USD and CAD. • The steep fall in Canada’s Ivey PMI indicates diminishing business sentiment, and further dismal economic data will place extra stress on the CAD in the short term. USD/CAD pair moves towards 1.3800, market participants stay nervous in anticipation of the Federal Reserve interest rate decision, with market focus on Chair Jerome Powell’s remarks on potential rate cuts and their implications during the prevailing uncertainty over trade. The result of US-Canada trade negotiations, especially after the recent encounter between Prime Minister Mark Carney and President Donald Trump, is also a critical consideration, since any development or reversal in tariff negotiations may impact the CAD’s performance. Also, the high-level US-China trade talks scheduled this weekend might affect global risk sentiment, impacting both currencies in turn. At the same time, Canada’s weak Ivey PMI provides a hint that business sentiment may slow down, exposing the CAD to more downward risks if domestic economic indicators remain weak. USD/CAD currency pair is moving towards 1.3800 as market focus shifts to the Federal Reserve interest rate decision and US-China-Canada trade negotiations. Canada’s softening economic indicators, led by a steep decline in the Ivey PMI, put more pressure on the CAD. •  The pair is quoted at 1.3790, making up losses from the last session as the US Dollar strengthens. •   Market players are wary in front of the Federal Reserve interest rate decision, with the expectation of no change but increased focus on Chair Jerome Powell’s testimony. •   President Trump keeps putting pressure on the Fed for possible rate cuts, which shifts market mood. •  Recent Canadian PM Mark Carney press conference with US President Trump indicated positive negotiations, with more discussions to follow at the G7. •  US Trade Representative Greer and Treasury Secretary Bessent are sitting down with Chinese Vice Premier He Lifeng in Geneva in a breakthrough meeting of international trade tensions. •  Canada saw its business sentiment decline steeply in the April Ivey PMI. •  Gaining risk appetite across the world lifted the Canadian Dollar, even if global trade issues continue to put a strain on domestic concerns. Investors are keeping a close eye on events on several fronts as the USD/CAD currency pair stays flat in anticipation of major economic and political developments. The attention is mainly on the forthcoming Federal Reserve interest rate announcement, where markets expect nothing to change but remain sensitive to comments from Chair Jerome Powell, particularly against the backdrop of continuing trade tensions and political pressure from President Trump. These remarks are likely to offer hints on the Fed’s next policy course and how it will deal with inflation issues and world economic uncertainty. USD/CAD DAILY PRICE CHART CHART SOURCE: TradingView Aside from the Fed, the global trade dynamic is also largely influencing market sentiment. Top-level meetings are scheduled to be held in Geneva between US and Chinese officials as there are indications of easing trade tensions. In the meantime, US President Donald Trump and Canadian Prime Minister Mark Carney have engaged in renewed discussions on trade, providing guarded optimism. That said, Canada’s soft business activity readings, notably the recent Ivey PMI reading, challenge the momentum of the country’s economy, reflecting the delicate dance between forward progress externally and trouble internally. TECHNICAL ANALYSIS USD/CAD is proving resilient as it lingers close to the 1.3800 level,  a landmark psychological resistance area. A prolonged break over this level would indicate more bullish strength, even opening the doors to recent highs. On the bearish side, near-term support is currently at 1.3730–1.3750, where buyers had earlier stepped in. Traders will be awaiting a clear breakdown or rejection around 1.3800 in order to identify the next direction bias, considering that upcoming fundamental drivers such as the Fed decision will drive volatility in the markets. FORECAST USD/CAD pair breaks and holds above 1.3800 resistance level, it might reflect renewed bullish push, and have the possibility of testing higher levels of 1.3850 and possibly 1.3900 in short term. Such move may find support due to sustained demand for US Dollar with global uncertainty, dovish Fed tone, or soft Canadian economic indicators. Upside developments in US-China or US-Canada trade negotiations may also enhance investor sentiment in the USD, adding to the pair’s upward pressure. Conversely, inability to hold above 1.3800 may lead to a corrective pullback, with initial support at the 1.3750 region. A breakdown below this region may see further declines towards 1.3700 or even 1.3660 if risk appetite improves or Canadian data begins to show signs of recovery. Any dovish tone from the Fed or breakthroughs in trade talks that benefit the Canadian economy could also pressure the

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Currencies

USD/CAD Strengthens Towards 1.3900 on Decreasing US-China Tensions and Dipping Oil Prices

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  • April 28, 2025
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USD/CAD currency pair is on the rise, reaching the 1.3900 level as decreasing US-China trade tensions increase demand for the US Dollar while declining crude oil prices drag on the Canadian Dollar. Hopes for better relations between the two economic giants have been fueled by China’s move to exempt some US goods from high tariffs, even as there have been conflicting official reports. Meanwhile, oil prices are falling further as a result of US-Iran nuclear talks making progress and rumors that OPEC+ will further raise output, putting the commodity-correlated CAD under pressure. With the Federal Reserve in blackout mode prior to its next policy decision, market attention continues to be on the geo-political events and energy market fundamentals. KEY LOOKOUTS • Any fresh remarks or actions pertaining to the tariff discussions could have implications for sentiment and USD strength. •  Oil weakness, particularly from US-Iran news or OPEC+ actions, could continue to keep the Canadian Dollar under selling pressure. •  The May 7 FOMC meeting will be closely monitored by markets for interest rate and economy direction signals. Canadian employment or inflation reports coming up could give the CAD guidance in the face of external pressures. USD/CAD are influenced by continuous progress in US-China trade relations, particularly any confirmation or rejection of tariff talks, which would influence investor sentiments and USD demand. Crude oil prices continue to be a key determinant of the Canadian Dollar, with risks to the downside emanating from expected OPEC+ production hikes and Iranian oil returning to world markets. In addition, investors are waiting for the forthcoming Federal Reserve policy meeting on May 7 to look for clues on interest rate direction, with Canadian economic reports like employment and inflation figures contributing to the near-term direction of the pair as well. Traders will be closely observing US-China trade headlines and crude oil price movements, both the main drivers for USD/CAD. Focus also shifts to the Fed meeting and Canadian economic releases for further guidance. • USD/CAD approaches 1.3900, posting gains for the second straight session. • Reducing US-China tensions boost the US Dollar after China temporarily exempts some US goods from tariffs. • Mixed signals emerge as Chinese officials refute reports of ongoing tariff talks. • DXY firm, trading close to 99.70, providing support to USD/CAD. • Fed is in blackout period before the May 7 FOMC meeting. •Declining oil prices weigh on the Canadian Dollar with US-Iran nuclear developments and OPEC+ output expectations. • Market attention turns to geopolitical developments, Fed policy cues, and future Canadian economic data. The USD/CAD currency pair continues to appreciate as market sentiment remains bullish on the US Dollar due to de-escalating tensions between the US and China. Optimism for better trade relations was rekindled following China’s move to exempt specific US imports from its high tariffs, which was seen as an indication of the possibility of thawing their months-long trade confrontation. Despite declarations by Chinese authorities that no talks are in process, the initial step has proved sufficient to give a boost to optimism regarding the prospects of world trade, helping the USD along the way. USD/CAD Daily Price Chart Source: TradingView At the same time, the Canadian Dollar is under pressure due to falling oil prices, which are closely tied to Canada’s economy. Crude prices have declined amid progress in US-Iran nuclear talks, raising the possibility of Iranian oil returning to global markets. Speculation that OPEC+ may increase oil output again has also added to the downward pressure. With the Federal Reserve in a period of silence before its policy meeting and uncertainty still surrounding trade and energy markets, USD/CAD is still sensitive to global news and commodity direction. TECHNICAL ANALYSIS USD/CAD is displaying bullish strength as it tests the important resistance level around 1.3900, boosted by two days of consecutive gains. The currency is trading above its short-term moving averages, reflecting strong purchasing interest, while momentum oscillators such as the RSI are still in neutral-to-bullish levels, reflecting scope for further appreciation before hitting overbought levels. A clean breakout above 1.3900 will potentially initiate a move towards the 1.3950–1.4000 range, while initial support is at 1.3800, which will possibly serve as a floor in the event of a correction. FORECAST If sentiment surrounding US-China relations remains strong and the US Dollar strengthens, USD/CAD can experience additional upside in the near future. Sustained trading above the 1.3900 level could draw additional bullish energy, with the pair moving towards 1.3950 or even 1.4000. Ongoing weakness in crude oil prices, especially if Iranian supply re-enters the market or OPEC+ increases production, will also continue to weigh on the Canadian Dollar, helping to propel the pair higher. But there are still downside risks if diplomatic optimism is lost or official comments persist in contradicting previous optimistic headlines and suppressing risk appetite and US Dollar bearishness. And any subsequent rebound in oil prices—on the back of supply disruptions or more robust global demand—may provide support to the Canadian Dollar and drag USD/CAD back down. Breaking through the support level of 1.3800 may initiate a more severe correction to 1.3740 or lower, particularly if future Canadian data surprises higher.

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