USD/CAD remains under pressure above 1.3700 ahead of US and Canada jobs report

  • USD/CAD meets fresh sales on Friday and breaks a two-day winning streak.
  • Dollar pulls back amid repositioning trade ahead of US NFP report.
  • The recent bull run in oil prices benefits the CAD and contributes to the pair’s decline.
  • The decline appears limited ahead of the US and Canadian jobs report.

The pair USD/CAD is struggling to capitalize on gains posted in the past two days and is under some selling pressure on Friday. The pair remains under pressure during the first half of the European session and is currently sitting near the daily low, just above the 1.3700 level.

US dollar pulls back from near weekly high amid repositioning trade ahead of monthly US jobs data. The loonie, meanwhile, is supported by Bank of Canada Governor Tiff Macklem’s comments the day before and the recent bull run in crude oil prices.. This, in turn, puts downward pressure on the USD/CAD pair, although the decline appears cushioned, at least for now.

OPEC+’s decision to cut production by about 2 million bpd, the largest decline since the 2020 covid pandemic, continues to act as a tailwind for black gold. However, concerns that a deeper economic recession will affect fuel demand prevent it from increasing further. Also, Prospects for more aggressive Fed policy tightening should limit dollar losses and give some support to the USD/CAD pair.

In fact, the markets seem to be convinced that the US central bank. will keep raising rates at a faster pace to curb inflation and have been pricing in another 75 basis point hike in November. These expectations were reinforced by recent hawkish comments from several Fed officials, who continue to support elevated US Treasury yields. This, coupled with recession fears, supports the prospect of some safe-haven dollar buying.

Additionally, traders will prefer to wait for the release of monthly US and Canadian employment data, due later at the start of the American session. Therefore, it will be prudent to wait for a strong follow-up of selling before confirming that this week’s strong rebound from the psychological 1.3500 level has been exhausted and placing further bearish bets on the USD/CAD pair.

USD/CAD technical levels

USD/CAD

Overview
last price today 1.3724
daily change today -0.0025
daily change today -0.18
Daily opening today 1.3749
Trends
daily SMA20 1.3454
daily SMA50 1.3158
daily SMA100 1.3007
daily SMA200 1.2849
levels
Previous daily high 1.3755
Previous Daily Low 1.3565
Previous Weekly High 1.3838
Previous Weekly Low 1,356
Previous Monthly High 1.3838
Previous Monthly Low 1.2954
Daily Fibonacci of 38.2% 1.3682
Daily Fibonacci of 61.8% 1.3638
Daily Pivot Point S1 1.3624
Daily Pivot Point S2 1.3499
Daily Pivot Point S3 1.3433
Daily Pivot Point R1 1.3814
Daily Pivot Point R2 1,388
Daily Pivot Point R3 1.4005

Source: Fx Street

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