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USD/CAD declines and approaches 1.3550 support ahead of US NFP

  • The dollar falls while waiting for the NFP report
  • The rebound in Oil prices provides support to the CAD.
  • Long term, the pair is in a corrective move following the November sell-off.

The US dollar loses ground on Friday, ending a 4-day rally, while the loonie trims losses, helped by rising oil prices ahead of the US Nonfarm Payrolls report.

The dollar’s recovery lost steam on Thursday, after last week’s increase in jobless claims confirmed the weakening of the US labor market anticipated by the JOLTs Job Openings report and the ADP report, and as speculation increased about a Fed rate cut in 2024.

In Canada, the Bank of Canada kept rates on hold on Wednesday, leaving the door open for further tightening, although talk of cooling inflationary pressures has acted as a headwind for the CAD.

US NFP Likely to Drive USD Volatility

The focus today will be on the US NFP, which is expected to show a moderate increase in employment and hourly wages. Investors will be watching these figures with particular interest for confirmation that the Fed’s rate hikes have come to an end, which could drive volatility in US Dollar crosses.

The technical picture shows that the pair is correcting higher, after a 3% sell-off in November. The next resistances are likely to be at the 100 4-hour SMA at 1.3600, the November 30 high, 1.3622 and 1.3700.

Supports are 1.3520 and December 4 low at 1.3475.

Technical levels to monitor

USD/CAD

Overview
Latest price today 1.3582
Today Daily variation -0.0014
Today’s daily variation -0.10
Today’s daily opening 1.3596
Trends
daily SMA20 1.3654
daily SMA50 1.3692
SMA100 daily 1.3579
SMA200 daily 1.3517
Levels
Previous daily high 1,362
Previous daily low 1.3584
Previous weekly high 1.3661
Previous weekly low 1.3487
Previous Monthly High 1.3899
Previous monthly low 1.3541
Daily Fibonacci 38.2 1.3606
Fibonacci 61.8% daily 1.3598
Daily Pivot Point S1 1,358
Daily Pivot Point S2 1.3564
Daily Pivot Point S3 1.3545
Daily Pivot Point R1 1.3616
Daily Pivot Point R2 1.3636
Daily Pivot Point R3 1.3652

Source: Fx Street

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