- USD/CAD attracts buyers for the fourth straight day amid a bullish US Dollar.
- The divergent Fed-BoC expectations further contribute to the positive move.
- Rising Crude Oil prices fail to benefit the Loonie and hinder the momentum.
- Traders look to the release of monthly jobs reports from the US and Canada.
The USD/CAD pair prolongs its uptrend for the fourth successive day on Friday and has now reverses a major part of its weekly losses amid sustained US Dollar (USD) buying. In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, climbs back closer to a two-year peak touched last week on the back of the Federal Reserve's (Fed) hawkish outlook. Moreover, the Minutes of the December FOMC meeting, showed that policymakers viewed labor market conditions as gradually easing and were in favor of slowing the pace of rate cuts amid stalling disinflation. Furthermore, US President-elect Donald Trump's expansionary policies are expected to boost inflation, which in turn, keeps the US Treasury bond yields elevated and acts as a tailwind for the buck.
Apart from this, persistent geopolitical tensions stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with trade war fears, continue to support the safe-haven Greenback. Meanwhile, Trump's tariff threats cloud the economic outlook and offset the optimism around a likely change in government in Canada. Moreover, the markets are currently pricing in a greater chance of another 25-basis-point rate cut by the Bank of Canada (BoC) in January, which is seen undermining the Canadian Dollar (CAD) and lending additional support to the USD/CAD pair. Traders seem rather unaffected by bullish Crude Oil prices, which tend to underpin the commodity-linked Loonie, suggesting that the path of least resistance for spot prices remains to the upside.
Investors, however, might refrain from placing aggressive directional bets and opt to wait for the release of the crucial monthly employment details from the US and Canada, due later during the early North American session. The popularly known US Nonfarm Payrolls (NFP) report is expected to show that the world's largest economy added 160K jobs in December and the Unemployment Rate held steady at 4.2%. Meanwhile, the number of employed people in Canada is forecast to have risen by 25K during December and the Unemployment Rate is seen edging higher to 6.9% from 6.8% in November. A big divergence from the anticipated numbers is more likely to infuse volatility around the USD/CAD pair and produce short-term trading opportunities on the last day of the week.
USD/CAD 4-hour chart
Technical Outlook
Any subsequent move up is likely to confront some resistance near the 1.4430-1.4435 supply zone, above which the USD/CAD pair could aim to retest the multi-year peak, around the 1.4465 region touched in December. Given that oscillators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone, some follow-through buying will set the stage for a move towards the 1.4500 psychological mark.
On the flip side, any corrective pullback might now attract some dip-buying near the 1.4350-1.4345 region. This should help limit the downside near the 1.4300 mark, which is closely followed by the weekly swing low, around the 1.4280-1.4275 region. Some follow-through selling might shift the bias in favor of bearish traders and make the USD/CAD pair vulnerable to accelerate the slide towards the 1.4200 round figure.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks

EUR/USD turns negative near 1.1000, Dollar trims losses
The now mild bounce in the US Dollar puts EUR/USD under pressure and drags it back to the proximity of the 1.1000 support as investors continue to assess the stronger-than-expected NFP figures in March (+228K).

GBP/USD stays offered around 1.3000 on USD-buying
The now generalised selling pressure hurting the risk complex sends GBP/USD back to the 1.3000 neighbourhood amid heavy losses and the marked rebound in the Greenback, particulalry following solid prints from the US labour market report.

Gold remains on the back foot around $3,000 after US Payrolls
In the wake of March’s US labour market report, Gold prices maintain their offered tone around the critical $3,000 mark per troy ounce amid marginal gains in the Greenback and further weakness in US yields.

Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.

Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.