The USDCAD experienced fluctuation due to news on tariffs and unexpectedly strong Canadian jobs data. Initially, the pair rose with tariff announcements but dropped after the jobs data release, settling at earlier lows during the Asian session before climbing again.
Technically, the USDCAD fell below the 100-hour moving average at 1.3675, encountering support near the day’s low. The pair’s bounce led to a retest of this moving average, with sellers turning into buyers. A subsequent support test on the 5-minute chart increased demand, boosting buyers’ confidence and initiating a price rise.
Pre Data Release Levels
The pair has now returned to pre-data release levels, indicating a crucial point. Surpassing and maintaining above 1.3700 might pave the way for more upward movement. The next significant target is the 38.2% retracement from the May high, set at 1.37208. The day’s earlier high briefly exceeded this retracement amid reports of a 35% Canadian tariff. A sustained rise above 1.37208 could bolster a positive outlook for USDCAD.
What we’ve seen so far is a reactive dance between economic data and political headlines. Initially, there was a bump in the USDCAD following tariff headlines—details of which prompted short-term buying interest. That move was fairly typical: news of potential trade barriers tends to favour the US dollar initially as a precautionary bid builds. But that didn’t hold. The strength of the Canadian labour report shifted momentum entirely. Once the data showed higher employment numbers than anticipated, appetite for Canadian dollars returned in force, counteracting the previous run-up.
Technically speaking, the currency moved below a short-term moving average—what we often use as a gauge of near-term direction. That dip was met with support at a nearby price level, leading the pair to briefly hover before buyers clearly gained the upper hand. If anything, this demonstrates traders’ willingness to build positions once a technical retest confirms previous demand, reinforcing bullish intent after initial hesitation.
Testing Old Ground
Now, we find the pair testing old ground—specifically the region marked by levels seen before the employment numbers. This return to previous levels suggests hesitancy, possibly even equilibrium between buyers and sellers. However, pushing above 1.3700 and staying there would provide further validation for those leaning long. That’s because maintaining strength above that pivot implies that demand isn’t fleeting.
We must acknowledge that 1.37208, identified by the retracement from May’s high, acts as the next measurable hurdle. Earlier in the day, price briefly ran through this area amid continued tariff headlines, but there was no follow-through. If buyers manage to hold the price above this level for several sessions, it will likely attract more participation. Often, the ability to stay above a retracement rather than just touch it is more telling.
From here, our attention turns to how the price behaves around 1.3720 and whether volume builds behind upward pushes. Look for responses near moving averages across intraday timeframes—these often map short-term behaviour effectively in uncertain sessions. Watch whether support turns into a stepping stone if we slip again. Sustained interest beyond technical resistance highlights stronger conviction among large players, especially after volatile sessions.
