USD/CAD Holds Below 1.3700 as Traders Await Key US and Canadian Jobs Data

USD/CAD Struggles Below 1.3700 as Market Awaits Jobs Reports

The USD/CAD currency pair remains under pressure early Friday, trading near the 1.3665 level after failing to break back above the key 1.3700 resistance zone. The pair has entered a period of sideways consolidation, hovering close to its year-to-date low set on Thursday.

US and Canadian Employment Data Loom Large

Markets are on edge ahead of today’s release of monthly jobs data from both the United States and Canada, which could trigger sharp moves in the USD/CAD pair. Forecasts suggest potential job growth in both economies, but the market reaction will likely hinge on surprises in unemployment rates or wage inflation.

CAD Supported by Trade Optimism

The Canadian Dollar (CAD) remains well-supported by optimism around a US-Canada trade agreement that may be reached ahead of the G7 Summit on June 15. This sentiment adds a bullish tailwind to the CAD, especially amid a weakening US Dollar and improved risk appetite in broader markets.

US Dollar Firm but Fails to Lift USD/CAD

Despite a modest uptick in the US Dollar Index (DXY), the USD/CAD pair has failed to attract meaningful buying interest. This suggests that technical pressure and CAD strength are currently outweighing dollar flows.

Technical Analysis: Bearish Momentum Persists

The pair’s failure to reclaim 1.3700 and repeated closes below that level reinforce a bearish technical outlook. Momentum indicators on the daily chart support this view, with oscillators showing downward strength and no sign of bullish divergence.

Key levels to watch on the downside:

• 1.3635 – YTD low and immediate support
• 1.3600 – Psychological round number
• 1.3545 / 1.3500 – Deeper targets if bearish momentum continues

In Summary:

• USD/CAD remains vulnerable ahead of jobs data
• CAD buoyed by trade deal optimism
• Technicals point to more downside toward 1.3600
• US and Canada employment numbers will be key drivers

More Forex Insights from Tredu:

• USD Index Forecast – What’s Next for the Greenback?
• CAD Outlook: Can Canada’s Economy Keep Up the Momentum?
• Top Technical Patterns to Watch in June