- The USD/CAD is lower in trade around 1.3800 areas, providing recent gains in the middle of a widely vulnerable US dollar and improving the regional sentiment.
- US Nonfarm's payrolls come better than expected of 177,000, but soft ISM and unemployed data claims keep fed rate cut bets intact, while Canada remains on -to -be -ventelined.
- The technical indicators remain bearish, with a major resistance to 1.3844 and support levels around 1.3760.
The USD/CAD is trading with losses around the 1.3800 level on Friday, as the pair continues to retreat from the previous sessions. The move came as the US dollar weakened the entire board after a failed attempt to recover a 100.00 mark on the US Dollar Index (DXY). Markets dissolve the latest rotation of labor data outside the US while positioning potential trade negotiations between the US and China in advance.
April's Nonfarm Payrolls (NFP) Nonfarm Payrolls (NFP) showed that the US economy added 177,000 jobs, leading the expectations of 130,000 and avoiding fear of a sharp slowdown in the labor market. However, details have stated that February and March payrolls have been changed to less than a combined 58,000 jobs, while the unemployment rate lasts at 4.2%. Wage growth came at 3.8% year-on-year, slightly below expectations. The initial claim of unemployment has risen to 241,000 in the latest week, the highest since mid-February, and the ongoing claims have hit their highest level since November 2021. This data points suggest that the cracks are emerging in the labor market, maintaining the hope of a federal reserve rate cut off early July.
Meanwhile, the ISM Manufacturing PMI softened in April, slipping 48.7 from 49.0 in March. Sub-index production refused especially at 44.0, indicating output weakening, although new orders and jobs showed marginal improvement. The price index increased moderately to 69.8, the highest since mid -2022, maintaining inflation concerns.
Trade optimism has been added to the strength of Canadian dollar. Reports that China may be open to restarting tariff communication in the US has sparked a revised hope of avoiding global trade tensions. Canadian economic data remained limited, but Loonie found support from general appetite and flow-associated flow, especially as energy and metal prices stabilized. No major releases are expected outside of Canada in advance of labor market data next week.
Technical analysis
From a technical stance, the USD/CAD shows a general signal, which is currently trading around 1.3800 and positioned in the mid-range between 1.3760 and 1.3856. The 10-day EMA at 1.3844 and the 10-day SMA at 1.3834 continues to force the pair from above. While the MACD suggests a mild bullish bias, the RSI at 34.67 remains neutral, and the Commodity Channel Index (CCI) at the -78.77 signal of weak momentum. Longer indicators including 20-day SMA at 1.3908, 100-day SMA at 1.4254, and 200-day SMA at 1.4011 all adopt a greater downside risk.
Immediate resistance can be found at 1.3807, followed by 1.3834 and 1.3844. At the downside, the support lies at 1.3760 – low session – with additional levels seen around 1.3730 and 1.3690. Unless the pair reclaims short-term moving averages, the bias remains tilted to the downside heading next week.
Sunny chart
