Resistance is seen at the 38.2% Fibonacci level at 1.3651, while overcoming it could lead to a move towards 1.3704. Failure to breach these resistance points may result in shallow rebounds and maintain spot prices near the 200-period SMA. This Indices’ release date is February 4, 2026, with a consensus forecast of 48K against a previous value of 41K. Traders view ADP figures as indicative of upcoming Nonfarm Payroll statistics, noting a high overlay with variances in individual months. A high ADP reading could imply upward pressure on interest rates, affecting the US Dollar positively.<\/p>\n
We are seeing the USD\/CAD pair trading defensively below the mid-1.3600s, but there is no strong push lower. The main conflict is a softer US Dollar, driven by expectations of more Federal Reserve rate cuts, being offset by weaker crude oil prices which hurts the Canadian loonie. This leaves the pair without a clear immediate direction.<\/p>\n
We recall that the Fed began its rate-cutting cycle in late 2025 as the economy slowed, but recent data has been mixed. For instance, the last US Consumer Price Index report for January 2026 came in at 3.2%, slightly above forecasts, making the market nervous about the pace of future cuts. This puts immense focus on labor market data to justify the market’s dovish expectations.<\/p>\n
Today’s ADP employment figure is the key event, with consensus at a low 48,000. A number well above this would challenge the rate cut narrative and likely cause a sharp rally in the USD\/CAD pair. We saw several times in the second half of 2025, however, that the ADP report poorly predicted the official NFP data, so any initial move should be treated with caution.<\/p>\n
On the other side of the pair, the drop in WTI crude oil to around $72 a barrel continues to be a major headwind for the loonie. The Bank of Canada also appeared more cautious than the Fed in its last meeting in January, signaling it was not yet ready to cut rates. This policy difference is providing underlying support and preventing a significant slide in the pair.<\/p>\n
Given the uncertainty ahead of the US jobs data, derivative traders could consider strategies that profit from a potential spike in volatility. Buying a straddle, which involves buying both a call and a put option at the same strike price, could be a way to position for a big move in either direction. For those leaning bearish on the pair, buying put options offers a defined-risk approach to target a move lower if the US data comes in particularly weak.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CAD trades below mid-1.3600s; weak technical outlook hints at further downside amid mixed market signals.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40905","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-ca\/wp-json\/wp\/v2\/posts\/40905","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=40905"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40905\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=40905"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=40905"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=40905"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}