The USD/CAD currency pair ascended to a four-month zenith, touching 1.3640, as robust U.S. job data contrasted with Canada’s weaker employment figures, steering the exchange rate dynamics.

The U.S. Bureau of Labor Statistics reported a substantial increase in Nonfarm Payrolls, with 303,000 new jobs added, vastly outstripping the forecasted 200,000 and the previous 270,000.

This surge pushed the Unemployment Rate down to 3.8%, suggesting a robust labour market that could temper the Federal Reserve’s urgency to cut interest rates, now more tentatively eyed for June.

Wage Growth and Inflation Concerns

The strong labour market in the U.S. has led to increased wage pressures, with employers raising pay to attract scarce workers, which could perpetuate higher inflation levels.

Minneapolis Fed President Neel Kashkari highlighted that if inflation remains stable, rate reductions this year would be unnecessary, with the Fed’s dot plot hinting at potential cuts in 2024.

Contrasting Canadian Job Market

In contrast, Canada’s employment data showed a loss of 2,200 jobs, deviating from the expected increase of 25,000, elevating the Unemployment Rate to 6.1% against the anticipated 5.9%. However, Average Hourly Earnings in Canada displayed resilience, growing at 5.0% annually, an uptick from 4.9% in February.

These labour market dynamics have propelled the USD/CAD price forecast, with the pair showcasing strength due to the divergent economic indicators.

Looking Ahead: Economic Indicators

Key upcoming events include Canadian and U.S. employment changes and unemployment rates, alongside the Ivey PMI for Canada, which stood at 57.5 against the forecast of 54.2, reflecting the economic activities’ health.

These figures will be crucial in shaping the USD/CAD price forecast, as market participants assess the potential for policy shifts by the Bank of Canada and the Federal Reserve in response to the evolving economic landscape.

USD/CAD Price Forecast: Weekly Outlook

The USD/CAD pair closed the week at 1.3588, marking a 0.39% increase. The pivot point for the pair is at 1.3611, with resistance levels at 1.3660, 1.3710, and 1.3764. Support is found at 1.3537, 1.3477, and 1.3423.

The Relative Strength Index (RSI) is at 56, indicating a tilt towards buying momentum, while the 50-day Exponential Moving Average (EMA) at 1.3524 provides underlying support.

The currency pair exhibits a bullish trend, especially if it sustains above 1.3537, with potential for further gains. Conversely, slipping below this support level might trigger a significant downtrend.