The USD\/CAD pair hovers around 1.3700, showing minor losses. Technical analysis points towards a bullish breakout, yet the 14-day RSI at 35.12 indicates weak momentum. The pair remains below key moving averages, with a fresh five-month low of 1.3642 seen on 26 December. <\/p>\n
Should the pair continue to decline, it could fall toward the lower boundary of the descending wedge, targeting levels around 1.3550 and 1.3539. Alternatively, a move above the nine-day EMA at 1.3715 could see the pair test the 50-day EMA at 1.3848, potentially eyeing a recent high of 1.4014 set earlier in December.<\/p>\n
In currency movements, the Canadian Dollar showed mixed performance against major currencies. The CAD was strongest against the Japanese Yen, gaining 0.18%, while it lost 0.17% against the US Dollar. A heat map outlines the percentage changes in various currency pairs, using the base currency from the left column and the quote currency from the top row. <\/p>\n
This technical analysis involved an AI tool, ensuring precise Forex market insights. Akhtar Faruqui, a Forex Analyst in New Delhi, India, contributed to the article.<\/p>\n
As we entered the final weeks of 2025, the technical picture for USD\/CAD was showing signs of weakness, with the pair hovering around the 1.3700 level. The Relative Strength Index was low, suggesting the downtrend might have been overextended as it tested a five-month low of 1.3642. The immediate focus was on whether this support would hold or if a further decline toward 1.3550 was imminent.<\/p>\n
However, the fundamental landscape shifted this morning with the release of the December 2025 employment reports for both countries. The US Non-Farm Payrolls data came in stronger than expected at +210,000, beating the consensus of +175,000 and showing persistent wage growth. In contrast, Canada’s Labour Force Survey disappointed with a net loss of 5,000 jobs, pushing its unemployment rate up to 6.3%.<\/p>\n
This new data fundamentally challenges the bearish technical outlook from late last month, suggesting we should now position for USD strength. The divergence in job numbers strengthens the case for the Federal Reserve to maintain a more hawkish stance compared to the Bank of Canada. We should consider buying near-term call options to capitalize on a potential sharp upward move, with initial targets above the 1.3715 resistance level.<\/p>\n
The low of 1.3642 set on December 26, 2025, now looks less like a target and more like a significant level of support for the pair. A decisive break above the nine-day EMA at 1.3715 would signal a reversal, putting the 50-day EMA at 1.3848 squarely in our sights. Given the fresh data, using put options to hedge against downside risk below 1.3600 appears less urgent.<\/p>\n
This situation is reminiscent of periods in 2023 when divergent economic data led to rapid repricing in the currency pair. Furthermore, with WTI crude oil prices having softened over the holiday period to around $77 per barrel, the Canadian dollar faces an additional headwind. Therefore, we see the balance of risks in the coming weeks tilting firmly to the upside for USD\/CAD.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CAD tests key levels near 1.3700; bearish momentum persists despite potential for bullish breakout signals ahead.<\/p>\n","protected":false},"author":62,"featured_media":16960,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=38119"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38119\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16960"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=38119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=38119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=38119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}