USD/CAD Price Analysis: Refreshes two-week high ahead of US/Canada Employment data

USD/CAD has climbed to near 1.3380 as investors turn anxious ahead of US labor market data.
The Unemployment Rate in the US and Canada in December is seen at 3.8% and 5.9% respectively.
A decisive break above 23.6% Fibo retracement has improved appeal for the Loonie asset.

Sagar Dua FXStreet

The USD/CAD pair prints a fresh two-week high near 1.3380 in the London session. The Loonie asset has witnessed a decent buying interest due to a sharp recovery in the US Dollar Index (DXY) amid cautious market mood ahead of the United States Nonfarm Payrolls (NFP) report.

As per the estimates, investors see 170K jobs being created in December against overall hiring of 199K in November. The Unemployment Rate is seen marginally higher at 3.8% vs. the former reading of 3.7%. The upbeat ADP Employment data, released on Thursday, has set a positive undertone for the labor growth.

An upbeat US NFP report is expected to trim prospects of rate cuts by the Federal Reserve (Fed) from March, knowing that higher job growth will keep the last leg of underlying inflation sticky ahead.

Meanwhile, the Canadian Dollar will also dance to the tunes of its domestic labor market data, which will be published at 13:30 GMT. Canada’s jobless rate is seen higher at 5.9% vs. the prior reading of 5.8%.

USD/CAD has climbed above the 23.6% Fibonacci retracement (plotted from 1 November 2023 high at 1.3900 to 27 December 2023 low at 1.3177) at 1.3350. Upward-sloping 50-period Exponential Moving Average (EMA), which trades around 1.3310 will continue to provide support to the US Dollar bulls.

The Relative Strength Index (RSI) (14) has shifted into the upside range of 60.00-80.00, which indicates that a bullish momentum has been triggered

Fresh buying would appear if the Loonie asset corrects marginally to the 23.6% Fibo retracement, which is around 1.3350. This will drive the asset towards December 18 high at 1.3410, followed by 38.2% Fibo retracement at 1.3453.

On the flip side, downside bias could stem if the pair drops below December 28 low of 1.3180. This would expose the asset to July 25 low near 1.3150, followed by July 13 low around 1.3193.

USD/CAD four-hour chart

USD/CAD

Overview
Today last price	1.3376
Today Daily Change	0.0023
Today Daily Change %	0.17
Today daily open	1.3353

Trends
Daily SMA20	1.3356
Daily SMA50	1.3561
Daily SMA100	1.3581
Daily SMA200	1.3483

Levels
Previous Daily High	1.3366
Previous Daily Low	1.3317
Previous Weekly High	1.3267
Previous Weekly Low	1.3178
Previous Monthly High	1.362
Previous Monthly Low	1.3178
Daily Fibonacci 38.2%	1.3336
Daily Fibonacci 61.8%	1.3347
Daily Pivot Point S1	1.3324
Daily Pivot Point S2	1.3296
Daily Pivot Point S3	1.3276
Daily Pivot Point R1	1.3373
Daily Pivot Point R2	1.3394
Daily Pivot Point R3	1.3422

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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