The USD/CAD currency pair rebounded to near 1.3833 on Friday, recovering from a two-week low of 1.3805 and snapping a four-day losing streak. This move was supported by a stronger US Dollar, with the US Dollar Index (DXY) trading 0.15% higher at approximately 98.95 ahead of negotiations between the United States and Iran regarding a 10-point peace proposal in Pakistan over the weekend [1]. Earlier in the week, Iran delivered a proposal to the US for a permanent ceasefire, which included reopening the Strait of Hormuz and a two-week truce [1].
Investors are closely watching upcoming economic data releases. In the US, the Consumer Price Index (CPI) for March is scheduled for release at 12:30 GMT, which is expected to influence market expectations regarding the Federal Reserve's monetary policy outlook [1]. In Canada, labor market data will also be released at the same time, with consensus estimates suggesting the economy created 15,000 new jobs following a loss of 83,900 jobs in February. The unemployment rate is projected to rise to 6.8% from 6.7% [1].
Technical analysis indicates that USD/CAD is trading higher around 1.3830, with the near-term bias turning neutral and the overall outlook remaining bullish. The 20-day exponential moving average (EMA) has flattened at around 1.3824 after a month of gains, and the Relative Strength Index (RSI) at 53.6 suggests constructive upward momentum without being overstretched [1]. Key support is identified at the two-week low of 1.3800, while resistance levels are noted at the April 2 low of 1.3870 and the March 31 high of 1.3967 [1].
Canada's labor market statistics, particularly the Net Change in Employment, are expected to have a significant impact on the Canadian dollar. A higher employment figure is generally seen as bullish for CAD, while a lower figure is bearish [1].
CONCLUSION
USD/CAD has rebounded from recent lows, supported by a stronger US Dollar and anticipation of key economic data releases. The upcoming US CPI and Canadian labor market reports are likely to influence market direction and expectations for monetary policy. Technical indicators suggest a neutral-to-bullish outlook, with traders watching for further developments in both economic data and geopolitical negotiations.