The US dollar/Canadian dollar pair approached its monthly high, supported by expectations of strong non-farm payroll data.
2026-01-09 14:17:16
The US dollar traded firm against the Canadian dollar in Asian trading on Friday, near its monthly high of 1.3888. Traders were generally on the sidelines ahead of upcoming US and Canadian employment data, with short-term directional trading somewhat subdued.
In the US, the market expects non-farm payrolls to increase by about 60,000 in December, down from 64,000 in November, and the unemployment rate may decline slightly to 4.5%. Federal Reserve officials have repeatedly emphasized that their concern about the weak labor market may outweigh the pressure of inflation remaining above 2%.
In 2025, the Federal Reserve implemented three interest rate cuts of 25 basis points each, citing significant risks in the job market. Therefore, non-farm payroll data will become a crucial indicator of the short-term trend of the US dollar.
Meanwhile, the US Dollar Index (DXY) remained near a four-week high of around 98.85, reflecting an overall strong dollar, which also provided support for the USD/CAD exchange rate.
In Canada, the market expects a net decrease of about 5,000 jobs in December, compared to an increase of 53,600 jobs in November, indicating signs of a cooling labor market.
The unemployment rate could rise from 6.5% to 6.6%. If the data confirms a slowdown in employment, the Bank of Canada may reassess its monetary policy outlook in the near term, increasing market bets on future easing and putting pressure on the Canadian dollar.
Overall, the moderate US economic data provided support for the US dollar, while expectations of a slowdown in Canadian employment increased the likelihood of pressure on the Canadian dollar, keeping the USD/CAD pair strong.
From the daily chart, the USD/CAD pair maintains its upward trend, with the price approaching the monthly high of 1.3888, indicating that bullish momentum remains strong. Technical indicators show that the 200-day EMA is around 1.3780, and the price is holding above the moving average, indicating that the upward trend remains intact and pullbacks will find support.
The MACD fast line remains in a golden cross above the zero line, with the red bars slightly expanding, indicating strong bullish momentum in the short to medium term. The RSI is around 61, in the neutral to strong range, and has not entered overbought territory, suggesting further upside potential in the short term.
If the USD/CAD pair steadily breaks through and holds above the 1.3888 resistance level, it could open up further upside potential. Support lies in the 1.3820–1.3800 area; a break below this level would increase the risk of a short-term pullback.
Editor's Note:
The USD/CAD pair is currently supported by both a strong US dollar and expectations of a slowdown in Canadian employment. In the short term, the exchange rate may remain volatile at high levels; caution is advised before the release of the non-farm payroll data. If the US non-farm payroll data is weak, expectations of further easing by the Federal Reserve may further support the US dollar.
If the data is strong, the Canadian dollar may face increased pressure, and the exchange rate is expected to test the monthly high further.
In the US, the market expects non-farm payrolls to increase by about 60,000 in December, down from 64,000 in November, and the unemployment rate may decline slightly to 4.5%. Federal Reserve officials have repeatedly emphasized that their concern about the weak labor market may outweigh the pressure of inflation remaining above 2%.
In 2025, the Federal Reserve implemented three interest rate cuts of 25 basis points each, citing significant risks in the job market. Therefore, non-farm payroll data will become a crucial indicator of the short-term trend of the US dollar.
Meanwhile, the US Dollar Index (DXY) remained near a four-week high of around 98.85, reflecting an overall strong dollar, which also provided support for the USD/CAD exchange rate.In Canada, the market expects a net decrease of about 5,000 jobs in December, compared to an increase of 53,600 jobs in November, indicating signs of a cooling labor market.
The unemployment rate could rise from 6.5% to 6.6%. If the data confirms a slowdown in employment, the Bank of Canada may reassess its monetary policy outlook in the near term, increasing market bets on future easing and putting pressure on the Canadian dollar.
Overall, the moderate US economic data provided support for the US dollar, while expectations of a slowdown in Canadian employment increased the likelihood of pressure on the Canadian dollar, keeping the USD/CAD pair strong.
From the daily chart, the USD/CAD pair maintains its upward trend, with the price approaching the monthly high of 1.3888, indicating that bullish momentum remains strong. Technical indicators show that the 200-day EMA is around 1.3780, and the price is holding above the moving average, indicating that the upward trend remains intact and pullbacks will find support.
The MACD fast line remains in a golden cross above the zero line, with the red bars slightly expanding, indicating strong bullish momentum in the short to medium term. The RSI is around 61, in the neutral to strong range, and has not entered overbought territory, suggesting further upside potential in the short term.
If the USD/CAD pair steadily breaks through and holds above the 1.3888 resistance level, it could open up further upside potential. Support lies in the 1.3820–1.3800 area; a break below this level would increase the risk of a short-term pullback.
Editor's Note:
The USD/CAD pair is currently supported by both a strong US dollar and expectations of a slowdown in Canadian employment. In the short term, the exchange rate may remain volatile at high levels; caution is advised before the release of the non-farm payroll data. If the US non-farm payroll data is weak, expectations of further easing by the Federal Reserve may further support the US dollar.
If the data is strong, the Canadian dollar may face increased pressure, and the exchange rate is expected to test the monthly high further.
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