USD/CAD Price Forecast: Remains in tight range near 1.4200, eyes on US NFP
The USD/CAD pair trades flat around 1.4210 during the European trading session on Thursday. The Loonie pair has remained sideways for over a week, with investors seeking fresh cues regarding the United States (US) interest rate outlook. For the same, investors await the US Nonfarm Payrolls (NFP) data for June, which will be published at 12:30 GMT.
According to estimates, the US economy created 110K fresh jobs, lower than 172K in May. The Unemployment Rate is seen remaining steady at 4.3%. Average Hourly Earnings, a key measure of wage growth, is estimated to arrive at 3.5% Year-on-Year (YoY), higher from 3.4% in May, with monthly figures rising steadily by 0.3%.
Assuming that wage growth drives the US core inflation significantly, investors will pay close attention to the data to get cues regarding the price rise outlook.
On Wednesday, Federal Reserve (Fed) Chairman Kevin Warsh warned at the European Central Bank (ECB) Forum in Sintra that inflation remains “too high”, while stressing the need to bring price stability.
Meanwhile, lower oil prices due to progress in indirect talks between the US and Iran, held in Doha on Wednesday, have diminished the appeal of currencies from economies, such as Canada, which are net oil exporters.
Technical Analysis:
USD/CAD trades flat at around 1.4200, while holding a clear bullish bias as spot remains above the 20-day exponential moving average (EMA) at 1.4103.
The Relative Strength Index (RSI) at 77.7 signals overbought conditions that could temper immediate upside without yet undermining the broader constructive tone.
On the downside, initial support is located at the 20-day EMA near 1.4103, where buyers are likely to defend the prevailing uptrend on any pullback. Looking up, the pair could extend its advance towards the 1 April 2025 high at 1.4415 if it breaks the ongoing consolidation inside the 1.4169-1.4248 upwards.
(The technical analysis of this story was written with the help of an AI tool.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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