On Friday during Asian trading hours, the USD/CAD pair rebounded from the previous day's pullback, trading above 1.42 (around 1.4230) . The core driver of the rise was the US dollar: persistent inflation concerns stemming from high energy costs, coupled with market expectations of further increases in US interest rates, provided solid support for the dollar; the US dollar index, which measures the dollar against a basket of currencies, remained strong, suppressing major non-US currencies, including the Canadian dollar. The biggest variable in the currency market this week is the upcoming US September non-farm payrolls report – economists expect approximately 90,000 new jobs added in September, a significant slowdown from August's 162,000, with the unemployment rate expected to remain at 4.1% . The data will provide crucial guidance for the Federal Reserve's future policy path and directly determine the short-term direction of the dollar. The Canadian dollar continues to face multiple pressures. As a commodity currency, the Canadian dollar is highly correlated with oil prices. Previously weak oil prices had compressed expectations for Canadian energy export revenue and worsened terms of trade, becoming a significant drag on the Canadian dollar. Meanwhile, the fundamentals of the Canadian economy are also lackluster – the latest data shows that GDP was flat month-on-month in July, ending three consecutive months of growth, with weakening manufacturing and retail trade being the main drags. Against this backdrop, TD Securities believes that the latest data showing "stagnant growth in July" reinforces the Bank of Canada's assessment at its October meeting that "there is no convincing reason to rush into raising interest rates," and the pace of policy tightening is expected to remain cautious, thus the Canadian dollar lacks support from the interest rate side. However, risks in the energy market are resurfacing. Although Middle Eastern oil shipments had previously recovered to near pre-war levels, the market has remained skeptical about the sustainability of this supply recovery—especially after a series of attacks on oil tankers in the Strait of Hormuz in recent months . Market surveys indicate that at least three oil tankers have been hit by unidentified projectiles in the area recently, and the Joint Maritime Security Agency has raised the maritime security threat level in the Middle East to "serious." Iran and its allies have also repeatedly attacked regional refining facilities, making a shift between "recovery" and "recurrence" in supply at any time possible. Geopolitically, risk premiums appear to be returning. The United States is considering sending another aircraft carrier to the Middle East and assessing the deployment of approximately 10,000 sailors and marines to the Persian Gulf, providing more options for potential escalation of military action—there are indications that the US may resume military strikes against Iran after the November midterm elections. If the situation deteriorates again, oil prices could rebound rapidly , at which point the support for the US dollar through the "inflation expectations → US interest rate expectations → US dollar" chain and the interplay between "energy export revenue → Canadian dollar" will become more complex. For the USD/CAD pair, rising oil prices are more favorable for the US dollar in the short term, but if the increase is too sharp, the Canadian dollar may also be partially hedged due to its commodity attributes; the direction still needs to be observed. From a global perspective, the strength of the USD/CAD pair is the result of a "strong US dollar + weak Canadian dollar" confluence: the Fed's tightening expectations and sticky inflation support the US dollar, while stagnant Canadian growth and the central bank's wait-and-see approach suppress the Canadian dollar. This combination of strength and weakness has caused the exchange rate center to continue to shift upwards. Market sentiment is generally bullish but cautious – with the non-farm payroll data release imminent, traders tend to avoid establishing aggressive positions before the data release , and the exchange rate may remain high, awaiting direction. Investors are focusing on three points: the US September non-farm payroll and wage data, the latest developments in the Strait of Hormuz, and the upcoming Bank of Canada's October policy signals . From a technical perspective, the USD/CAD pair maintains a bullish structure on the daily chart, trading above the 100-day moving average, and the uptrend of the past four weeks remains intact. However, short-term momentum has weakened somewhat, with the 4-hour RSI indicator in overbought territory around 75 , suggesting a potential pause in the upward momentum. On the upside resistance front, the 1.4260-1.4295 area represents a short-term dynamic resistance zone; a decisive break above this level could see the pair further challenge the highs near 1.4236 and even 1.4365 . On the downside support front, the 1.4200 level is a key intraday support/resistance level; a break below this level would require monitoring the 1.4145-1.4120 area , with stronger support around 1.4050. From a 4-hour chart perspective, the Bollinger Bands have not widened significantly, indicating relatively stable short-term volatility. The exchange rate is trading close to the upper Bollinger Band, with bullish momentum dominating. However, caution is advised when chasing higher prices in overbought conditions. If weak non-farm payroll data causes the dollar to fall, the exchange rate may need to test 1.4200 or even 1.4145. Conversely, if the data is strong, a break above the 1.4260-1.4295 resistance zone could open up new upside potential. Editor's Summary : Overall, the USD/CAD pair is currently in a favorable position, with a strong US dollar and a weak Canadian dollar. Sticky US inflation, expectations of interest rate hikes, and safe-haven demand are supporting the US dollar, while stagnant Canadian growth and the central bank's dovish stance continue to suppress the Canadian dollar. The medium-term bullish trend for the exchange rate has not yet reversed. However, two variables could change the current momentum: First, if tonight's non-farm payroll data significantly falls short of expectations, the US dollar will lose interest rate support, and the exchange rate risks retracing to 1.4200 or even 1.4145. Second, if the situation in the Strait of Hormuz escalates again, driving up oil prices, the Canadian dollar's commodity attributes may temporarily offset the decline, slowing the upward slope of the exchange rate. Looking ahead, a break above the 1.4260-1.4295 resistance zone will confirm the continuation of the trend, with a target of 1.4365; conversely, a loss below 1.4145 should raise concerns about a potential pullback to 1.4050. On the opportunity side, the exchange rate still presents a buying opportunity when it pulls back to the support range of 1.4200-1.4145; on the risk side, attention should be paid to the two-way volatility brought about by better-than-expected non-farm payrolls and sudden geopolitical changes.