USD/CAD Price Forecast: Recovers from three-week low; flat above 1.4150 ahead of jobs data

USD/CAD bounces off a three-week trough amid a combination of supporting factors.
Softer Oil prices undermine the Loonie and lend support amid a modest USD recovery.
The technical setup favors bearish traders as the focus shifts to Canadian jobs report.

Haresh Menghani FXStreet

The USD/CAD pair stages a modest intraday recovery from the 1.4135 area, or a three-week low touched this Friday, and climbs to the top end of its daily range during the early European session. Spot prices currently trade around the 1.4160 region, nearly unchanged for the day, as traders now look forward to Canadian monthly employment details for a fresh impetus.

In the meantime, a weaker tone around Crude Oil prices undermines the commodity-linked Loonie. The US Dollar (USD), on the other hand, bounces off over a one-week low amid prospects of at least one interest rate hike by the US Federal Reserve (Fed) in 2026 and concerns about a fresh escalation of tensions in the Middle East. This, in turn, assists the USD/CAD pair in attracting some buyers at lower levels.

From a technical perspective, spot prices now seem to have found acceptance below the 100-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, an intraday break below the lower boundary of a three-week-old trading range, near the 1.4150 area, could be seen as a key trigger for the USD/CAD pair. However, the lack of follow-through warrants caution before positioning for further losses.

Meanwhile, the Moving Average Convergence Divergence (MACD) remains marginally negative, and the Relative Strength Index (RSI) hovers just below the 50 line near 43. Momentum indicators together hint at subdued upside momentum and leaving the path of least resistance tilted to the downside. Hence, any further recovery could be seen as a selling opportunity and is more likely to fizzle out rather quickly.

On the topside, initial resistance is aligned with the 100-period SMA around 1.4190. A clear break above this level would be needed to ease the current bearish pressure and allow a recovery toward the trading range resistance, near mid-1.4200s, or the highest level since April 2025, touched last month. On the downside, 1.4100 now could act as an immediate support ahead of 1.4025 and the 1.4000 psychological mark.

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

USD/CAD 4-hour chart

Economic Indicator

Unemployment Rate

The Unemployment Rate, released by Statistics Canada, is the number of unemployed workers divided by the total civilian labor force as a percentage. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labor market and a weakening of the Canadian economy. Generally, a decrease of the figure is seen as bullish for the Canadian Dollar (CAD), while an increase is seen as bearish.

GBP/USD extends weekly uptrend, trades above 1.3400

GBP/USD clings to moderate gains and holds above 1.3400 in the European session on Friday. The British Pound gains amid optimism on the UK government leadership transition and Bank of England rate hike bets. Meanwhile, the US Dollar loses ground on Middle East de-escalation and receding Fed rate hike expectations.

EUR/USD rises to 1.1450 area on softer USD

EUR/USD continues to edge higher in the European session on Friday and trades near 1.1450. The US Dollar (USD) struggles to find demand as the US says they are committed to finding a diplomatic solution to end the conflict in the Middle East. Later in the day, the Federal Reserve will publish its Semiannual Monetary Policy Report.

Gold flat lines above $4,100 amid weaker USD, Fed hike bets and Iran risks

Gold reverses a modest Asian session dip to the $4,109-$4,108 region, though it lacks bullish conviction. The US Dollar selling remains unabated for the third consecutive day in the wake of Wednesday's less hawkish FOMC Minutes and offers some support to the commodity. However, prospects of a Fed rate hike in 2026 remain active.

Canada Unemployment Rate forecast to remain unchanged in June

Markets are anticipating a fairly stable report when Statistics Canada releases its Labour Force Survey on Friday. While the Net Change in Employment is predicted to rise by 10K in June, adding to the 87.8K gain in May, the Unemployment Rate is forecast to stay at 6.6%.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June Federal Open Market Committee meeting landed mid-round-trip, describing a world that had already stopped existing.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.