The USD/CAD pair struggles to build on its gains registered over the past two days and trades with a mild negative bias during the Asian session on Friday. Spot prices, however, hold above mid-1.3600s and remain close to a one-week top ahead of crucial employment details from the US and Canada.
In the meantime, hopes for a potential US-Iran peace deal keep a lid on any meaningful appreciation for the safe-haven US Dollar (USD) and cap the upside for the USD/CAD pair. However, a fresh leg down in Crude Oil prices is seen undermining the commodity-linked Loonie and acting as a tailwind for the currency pair. Traders also seem hesitant and opt to wait for the release of the US Nonfarm Payrolls (NFP) report and Canadian jobs data.
From a technical perspective, the USD/CAD pair holds a constructive near-term bullish bias as it trades above the 100-period Simple Moving Average (SMA) and the 23.6% Fibonacci retracement level of the recent fall from the March swing high. Adding to this, the Relative Strength Index (RSI) around 61 suggests positive but not yet overbought momentum, while the Moving Average Convergence Divergence (MACD) remains in mildly positive territory.
Momentum indicators, in turn, hint that upside pressure could persist as long as the currency pair defends its nearby floor. On the topside, initial resistance is seen at the 38.2% Fibo. retracement at 1.3708, with further hurdles at the 50.0% level at 1.3757 and the 61.8% retracement at 1.3807. A break above these would expose the 78.6% retracement at 1.3876 and the cycle high region near 1.3965.
On the downside, immediate support is provided by the 100-period SMA at 1.3653 and the 23.6% retracement at 1.3648, with a deeper pullback targeting the structural base around 1.3550.
(The technical analysis of this story was written with the help of an AI tool.)
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.
Read more.
Next release:
Fri May 08, 2026 12:30
Frequency:
Monthly
Consensus:
6.7%
Previous:
6.7%
Source:
Statistics Canada
Editorial note: This recovered market brief has been cleaned and reclassified by Next Move Markets for educational market intelligence. It is not investment advice.
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Next Move Markets desk view
For active traders, this brief should be read through the lens of currency markets rather than as a standalone headline. The key question is whether the theme behind USD/CAD Forecast: Edges lower to 1.3650 ahead of jobs data can influence positioning beyond the first reaction. That means watching central-bank expectations, yield differentials, dollar momentum and risk appetite together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether the move is confirmed by the U.S. dollar index and short-term rate expectations.
- How London and New York liquidity react once the initial headline risk is absorbed.
- Whether price action respects the latest support and resistance zones instead of fading immediately.
- Any follow-up comments from central-bank officials or data releases that change the rate path.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from central-bank expectations, yield differentials, dollar momentum and risk appetite. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For currency markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: USD/CAD Forecast: Edges lower to 1.3650 ahead of jobs data may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
