USD/CAD Price Forecast: Bulls turn cautious near 200-period SMA ahead of Canadian jobs data

The USD/CAD pair attracts some sellers following an intraday uptick to the 1.3725 region, or a nearly two-week high touched this Friday, and, for now, seems to have snapped a two-day winning streak amid a combination of negative factors. Crude Oil prices regain positive traction and reverse a major part of the previous day's losses amid nervousness ahead of the US-Iran talks. This, in turn, underpins the commodity-linked Loonie, which, along with a modest US Dollar (USD) downtick, exerts some downward pressure on the currency pair.

Despite differences over the agenda, a meeting between the US and Iran is set to go ahead in Oman amid heightened tensions. In fact, the White House press secretary Karoline Leavitt told reporters that diplomacy is US President Donald Trump's first choice for dealing with Iran, and he will wait to see whether a deal can be struck. Leavitt also warned that he has military options at his disposal. In fact, Trump has threatened to carry out strikes on Iran if an agreement cannot be reached. This keeps geopolitical risks in play and fuels concerns that the conflict could escalate into a wider war, which could disrupt oil supplies and prompt some short-covering around the black liquid.

Meanwhile, the USD stalls its recent goodish recovery from a four-year low amid the growing acceptance that the US Federal Reserve (Fed) will lower borrowing costs two more times in 2026. The bets were reaffirmed by the US data released this week, which pointed to signs of weakness in the labor market. In fact, the Automatic Data Processing (ADP) Research Institute reported on Wednesday that private-sector employers added 22K jobs in January vs. 37K prior. Moreover, the Job Openings and Labor Turnover Survey (JOLTS) showed on Thursday that the number of job openings on the last business day of December stood at 6.542 million, down from 6.928 million, down from 6.928 million prior.

Furthermore, the US Department of Labor reported that the number of citizens submitting new applications for unemployment insurance rose to 231K for the week ending January 31 from 209K in the previous week. Meanwhile, Trump said on Thursday that he would have passed on Kevin Warsh as his nominee for the Fed Chair if he had expressed a desire to hike interest rates. This, in turn, holds back the USD bulls from placing fresh bets and contributes to the offered tone surrounding the USD/CAD pair. Traders now look to the monthly Canadian jobs data, which, along with the preliminary Michigan Consumer Sentiment Index and Inflation Expectations, should provide a fresh impetus later today.

USD/CAD 4-hour chart

Technical Analysis:

An intraday failure near the 100-hour Simple Moving Average (SMA) on the 4-hour chart warrants caution before positioning for an extension of the USD/CAD pair's recovery from the 1.3480 region, or the lowest level since October 2024, touched last month. The 100-period SMA trends lower and sits above the price, maintaining a bearish bias as the spot holds beneath it. The Moving Average Convergence Divergence (MACD) remains just above the zero line with easing readings, suggesting waning bullish momentum.

Meanwhile, the Relative Strength Index (RSI) prints at 57 (neutral), slipping from recent highs and aligning with a moderating tone. As long as the USD/CAD pair stays below the 100-period SMA at 1.3724, rallies would face supply; a decisive close above that barrier could shift bias to the upside, while repeated failures to reclaim it would keep intraday advances contained and leave a slight bearish skew.

(The technical analysis of this story was written with the help of an AI tool.)