USD/CAD price slips to 6-day low amid strong Canada jobs report
USD/CAD slips 0.7%, struggles to hold above key 1.4330 support level
The USD/CAD currency pair faces renewed downside pressure, slipping 0.7% this week from the 1.4465 resistance level, a barrier repeatedly tested in recent weeks.
A combination of improved Canadian economic data and underwhelming U.S. indicators has shifted the outlook for the pair, putting the spotlight on its ability to hold above the key support level of 1.4330.
Canadian employment surged by 91,000 in December, pushing the unemployment rate down to 6.7% from 6.8%—the highest monthly gain since January 2023. This robust labor market performance has tempered expectations for near-term interest rate cuts by the Bank of Canada (BoC), adding strength to the Canadian Dollar (CAD). Conversely, the U.S. Dollar has struggled due to weaker-than-expected December Producer Price Index (PPI) data, raising concerns about inflationary pressures. The U.S. Dollar Index (DXY) has lost momentum, further weighing on USD/CAD.
USD/CAD price dynamics (November 2024-January 2025). Source: TradingView.
USD/CAD price prediction: Bearish momentum as RSI signals further downside
Technically, USD/CAD’s challenges are evident on the 4-hour chart. The Relative Strength Index (RSI) remains in bearish territory, suggesting continued downside potential. Although the RSI has not yet reached oversold conditions, the pair’s struggle to sustain a break below 1.4330 highlights this level's importance as a critical support zone. A failure to hold above it could signal deeper losses in the near term.
USD/CAD is poised for its third consecutive daily decline after touching a six-day low. Broader market sentiment reflects heightened uncertainty, placing additional focus on today’s economic data releases. Market participants are now awaiting the U.S. Consumer Price Index (CPI) inflation data, set to be released later today, which could provide further direction for the Greenback. For USD/CAD traders, the key question remains whether the pair can overcome bearish pressures or succumb to further losses below the crucial 1.4330 level, which represents a pivotal juncture for market direction.
Earlier this week, the USD/CAD pair briefly advanced to 1.4430 as the U.S. Dollar strengthened on a solid economic backdrop. Nonfarm Payrolls surged to 256,000 in December, pushing the unemployment rate down to 4.1%.
