USD/CAD sticks to modest gains around mid-1.3700s, focus remains on US/Canadian jobs data

USD/CAD stages a modest recovery from over a one-week low touched the previous day.
Some repositioning trade ahead of the US/Canadian jobs data lends support to the major.
The fundamental backdrop warrants caution before confirming that the pair has topped out.

Haresh Menghani FXStreet

The USD/CAD pair edges higher during the Asian session on Friday and reverses a part of the previous day's steep decline to the 1.3735 region, or over a one-week low. Spot prices currently trade around the 1.3750-1.3755 region, up just over 0.10% for the day, though the upside seems limited ahead of the monthly employment details from the US and Canada.

The popularly known NFP report is due for release later during the early North American session and might influence market expectations about the Federal Reserve's (Fed) next policy move. This, in turn, will play a key role in determining the next leg of a directional move for the US Dollar (USD). Apart from this, the Canadian jobs data should provide some meaningful impetus to the USD/CAD pair on the last day of the week.

In the meantime, expectations that the Fed is nearing the end of its policy-tightening campaign, along with the prevalent risk-on mood, might continue to act as a headwind for the safe-haven Greenback. Apart from this, the overnight goodish rebound in Crude Oil prices could underpin the commodity-linked Loonie and contribute to capping the upside for the USD/CAD pair, warranting caution before positioning for further gains.

The markets, meanwhile, are still pricing in the possibility of one more Fed rate hike move in December or January. In contrast, the Bank of Canada (BoC) Governor Tiff Macklem indicated last week that interest rates may have peaked. This, in turn, makes it prudent to wait for strong follow-through selling before confirming that the USD/CAD pair has topped out near the 1.3900 mark, or its highest level since October 2022 set on Wednesday.

Even from a technical perspective, spot prices have managed to hold above the 1.3700 strong resistance breakpoint, which should now act as a key pivotal point for short-term traders. Bulls, meanwhile, might now wait for a sustained strength back above the 1.3800 mark before placing fresh bets. Nevertheless, the USD/CAD pair remains on track to end in the red for the first week in the previous three.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3754
Today Daily Change	0.0014
Today Daily Change %	0.10
Today daily open	1.374

Trends
Daily SMA20	1.3721
Daily SMA50	1.3629
Daily SMA100	1.3465
Daily SMA200	1.3489

Levels
Previous Daily High	1.386
Previous Daily Low	1.3736
Previous Weekly High	1.3881
Previous Weekly Low	1.3661
Previous Monthly High	1.3892
Previous Monthly Low	1.3562
Daily Fibonacci 38.2%	1.3783
Daily Fibonacci 61.8%	1.3812
Daily Pivot Point S1	1.3697
Daily Pivot Point S2	1.3654
Daily Pivot Point S3	1.3573
Daily Pivot Point R1	1.3821
Daily Pivot Point R2	1.3902
Daily Pivot Point R3	1.3945

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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