USD/CAD Currency Pair Update

The USD/CAD pair showed a lackluster performance around 1.4175 during European trading on Friday. The Canadian dollar, or loonie, has been on a downward trend as the US dollar feels selling pressure following the Federal Reserve’s recent move away from a hawkish stance.

During European trading, the US Dollar Index (DXY), which measures the dollar against six major currencies, was down by 0.14% at approximately 100.70.

Weak nonfarm payroll data from the U.S. for June has traders reassessing their expectations regarding the Fed’s interest rate hikes. The data released on Thursday indicated that only 57,000 new jobs were added in June, which fell short of the anticipated 110,000.

Market participants are now turning their attention to the upcoming June ISM Services PMI data, set to be released on Friday.

On the Canadian side, the CAD is under pressure as oil prices have dropped back to levels seen before the Middle East conflict, considering Canada is a net oil exporter. The decline in oil prices has been attributed to Oman reporting progress in indirect negotiations between the U.S. and Iran.

USD/CAD Technical Analysis

The USD/CAD pair has dipped to around 1.4179, yet continues to show a bullish bias, remaining above both the 20-day and 50-day exponential moving averages (EMAs). Currently, the 20-day EMA sits at 1.4108 and the 50-day EMA at 1.3965, which supports the underlying uptrend. Notably, the Relative Strength Index (14) is just shy of the overbought threshold around 70, indicating there is still some upward momentum.

On the flip side, the USD is under pressure, and a correction could push it toward the 20-day EMA at 1.4110. Given the overall bullish outlook, a corrective move near this EMA might provide a buying opportunity for investors. If the pair can break above the June 24 high of 1.4248, it could regain momentum and possibly aim for 1.4300.