USD/CAD Outlook: Traders seem non-committed ahead of US NFP, Canadian jobs data

USD/CAD struggles to gain any meaningful traction amid the prevalent USD selling bias.
Bullish crude oil prices underpin the loonie and contribute to capping gains for the pair.
Traders now seem reluctant ahead of the monthly jobs report from the US and Canada.

Haresh Menghani FXStreet

The USD/CAD pair struggles to capitalize on the previous day's modest bounce from sub-1.3400 levels and oscillates in a narrow trading band through the Asian session on Friday. The upside remains capped amid the underlying bearish sentiment surrounding the US Dollar, which struggles near its lowest level since August amid dovish signals from the US central bank. In fact, Fed Chair Jerome Powell sent a clear message on Wednesday that the US central bank will soften its stance and said that it was time to slow the pace of interest rate hikes. Apart from this, signs of easing inflationary pressure and sluggish US Treasury bond yields continue to weigh on the greenback.

The US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) Price Index decelerated to 6% YoY in October from 6.3% previous. Adding to this, the annual Core PCE Price Index, the Fed's preferred gauge of inflation, edged down to 5% from 5.2% as expected. The softer data dragged the yield on the benchmark 10-year US government to a nearly two-month low. Apart from this, the recent strong recovery in crude oil prices from the YTD low underpins the commodity-linked Loonie and contributes to keeping a lid on the USD/CAD pair, at least for now.

Traders also seem reluctant to place aggressive bets ahead of the closely-watched US monthly employment details. The popularly known NFP will play a key role in influencing the near-term USD price dynamics ahead of the crucial FOMC meeting on December 13-14. Apart from this, traders will further take cues from Canadian jobs data and oil price dynamics to grab short-term opportunities around the USD/CAD pair. Nevertheless, the fundamental backdrop seems tilted in favour of the USD bears and suggests that the path of least resistance for the major is to the downside.

Technical Outlook

From a technical perspective, the overnight swing high, around the 1.3470 area, might act as immediate resistance ahead of the 1.3500 psychological mark. A sustained strength beyond could lift the USD/CAD pair towards the 1.3575-1.3580 hurdle en route to the 1.3600 round figure. The momentum could further get extended to a multi-week high, around the 1.3645 zone touched on Tuesday.

On the flip side, weakness below the 1.3400 mark is likely to find support near an ascending trend-line extending from November low, currently around the 1.3380 region. A convincing break below will expose the crucial 100-day SMA, near the 1.3300-1.3290 area. Some follow-through selling will be seen as a fresh trigger for bearish traders and set the stage for an extension of the recent decline from a 29-month peak touched in October.

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD slips back below 1.3200

GBP/USD remains well on the defensive, sliding to the sub-1.3200 area once again on Tuesday. Cable’s decline comes as investors assess the political uncertainty in the UK, coupled with softer-than-expected UK PMI data and the better tone in the Greenback.

EUR/USD breaks below 1.1400 to hit fresh 2026 lows

EUR/USD comes under fresh and strong selling pressure on Tuesday, slipping below 1.1400 to its weakest level since June 2025. Mixed PMIs readings from Germany and the Eurozone offered little support to the single currency, while a risk-off tone across markets and stronger-than-expected US data boosted demand for the US Dollar.

Gold drops to multi-day lows, focus is now on $4,000

Gold rapidly reverses Monday's bounce and is trading sharply lower on Tuesday. The yellow metal, however, manages well to keep business above the $4,100 mark per troy ounce despite a firmer US Dollar and expectations that the Fed will keep rates higher for longer.

MiCA regulations could be the next bullish catalyst for crypto – Georg Harer, co-CEO at Bybit EU

The cryptocurrency market is losing momentum and liquidity due to the lack of a bullish catalyst. In an exclusive interview with FXStreet, Georg Harer, co-CEO at Bybit EU, says that the Markets in Crypto-Assets (MiCA) regulations could inject liquidity into the crypto market from traditional fund houses.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.