USD/CAD Price Forecast: Holds 20-day EMA in countdown to US-Iran talks

USD/CAD ticks up to near 1.3850 as the US Dollar edges higher amid doubts over the US-Iran ceasefire.
Iran confirms sending a team to Pakistan to negotiate on the 10-point proposal with the US.
Investors await Canadian employment data for March, scheduled for Friday.

Sagar Dua FXStreet

The USD/CAD pair trades marginally higher around 1.3850 during the European trading session on Thursday. The Loonie pair gains temporary ground after a three-day losing streak as the US Dollar (USD) attracts slight bids, with investors starting to doubt the sustainability of the ceasefire between the United States (US) and Iran announced on early Wednesday.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% higher to near 99.10.

The uncertainty over the US-Iran ceasefire credibility has stemmed due to continuous attacks by Israel on Iran-backed Houthis in Lebanon. In response, Iran’s parliament speaker and chief negotiator, Mohammad Bagher Qalibaf has alleged the US for violating three clauses of the 10-point peace proposal.

Meanwhile, Iran has confirmed sending a team to Pakistan on late Thursday for the first round of talks with the US.

On the macro front, investors await the Canadian employment data for March, which will be released on Friday.

USD/CAD technical analysis

USD/CAD edges up to near 1.3850 in Thursday's European trade. The pair maintains a modest bullish near-term bias as spot holds above the 20-day exponential moving average (EMA) at 1.3827, keeping the latest upswing intact despite the recent pullback from last week’s highs.

The Relative Strength Index (RSI) at around 57 leans slightly to the bullish side without signaling overbought conditions, suggesting the advance could extend while price respects nearby dynamic support.

On the downside, initial support is located at the 20-day EMA around 1.3827, where a break would hint at a deeper corrective phase toward the March 3 high of 1.3750. As long as buyers defend this moving average, the broader constructive structure is likely to persist, leaving scope for fresh attempts to retest recent highs in the 1.3950 area.

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

Economic Indicator

Net Change in Employment

The Net Change in Employment released by Statistics Canada is a measure of the change in the number of people in employment in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending and indicates economic growth. Therefore, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

Why it matters to traders?

Canada’s labor market statistics tend to have a significant impact on the Canadian dollar, with the Employment Change figure carrying most of the weight. There is a significant correlation between the amount of people working and consumption, which impacts inflation and the Bank of Canada’s rate decisions, in turn moving the C$. Actual figures beating consensus tend to be CAD bullish, with currency markets usually reacting steadily and consistently in response to the publication.

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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