USD/CAD Price Forecast: Pair shows strength ahead of US/Canada jobs data

• With October employment figures from the US and Canada approaching, USD/CAD climbs sharply towards 1.4073.
• A worldwide sell-off in AI infrastructure shares drives the US Dollar’s outperformance.
• October is expected to have brought an additional 13.6K workers into Canada’s labour force.

A 0.45% rise takes USD/CAD towards 1.4073 in Friday’s European session, as the Canadian Dollar (CAD) comes under considerable selling pressure against the US Dollar (USD).

Ahead of the October Nonfarm Payrolls (NFP) release from the United States (US), due at 13:30 GMT, the US Dollar’s outperformance is lifting the Loonie pair.

Safe-haven demand stemming from the global Artificial Intelligence (AI) rout is supporting the US Dollar Index (DXY). At the time of writing, the index, which measures the Greenback against six major currencies, is 0.35% higher at around 101.95.

US jobs growth set to stay subdued, with upside risks flagged by TD

Soft US nonfarm payrolls growth is likely to persist in October, according to TD Securities, whose economists forecast headline gains of “40k after job gains moderated to 29k in September.” Explaining its projection, the bank says that “despite the subdued, below-consensus print, our forecast would be within the range of breakeven job gains and result in an increase in the three-month moving average.” Nevertheless, TD cautions that “risks to our payrolls forecast are to the upside,” indicating that the final figure could surpass its baseline estimate.

Due at the same time as the US NFP report, Canada’s October labour market figures are also in focus for investors.

Following the dismissal of 68.3K employees in September, Canadian employers are forecast to have taken on 13.6K new workers. Expectations point to an unchanged Unemployment Rate of 6.5%.

USD/CAD Holds Its Near-Term Bullish Bias

Trading at 1.4071 on the four-hour chart, USD/CAD retains a bullish near-term outlook. The pair remains above both its 20-period exponential moving average (EMA) at 1.4000 and the key Fibonacci retracement levels of 1.4017 (50.0%) and 1.3950 (61.8%). Although the wider technical structure continues to favour support on dips, the Relative Strength Index (14) has entered overbought territory around 71.6, signalling that the latest rise could be overstretched.

The first upside hurdle lies at 1.4084, the 38.2% Fibonacci retracement. Should bullish momentum continue, subsequent resistance stands at the 23.6% level of 1.4167 and the recent upper Fibonacci anchor near 1.4302. Support is initially located at the 50.0% retracement of 1.4017, just ahead of the 20-period EMA at 1.4000. A more pronounced retreat would bring the 61.8% retracement at 1.3950 into view, with the Fibonacci base at 1.3733 providing a more distant structural floor.

(The technical analysis of this story was written with the help of an AI tool. Know more.)