USDCAD remains in focus as traders brace for a series of high-impact economic events that could influence both price direction and market sentiment. Thursday's calendar includes Switzerland's inflation data, the US Nonfarm Employment Change, and the ISM Services PMI—each capable of driving volatility in the FX space. These releases arrive at a technically significant moment for USDCAD, which has been under sustained bearish pressure since early February. As both macroeconomic and technical signals evolve, market participants will be watching closely for confirmation of trend continuation or signs of a potential reversal.
Overview
USDCAD remains in focus as traders brace for a series of high-impact economic events that could influence both price direction and market sentiment. Thursday's calendar includes Switzerland's inflation data, the US Nonfarm Employment Change, and the ISM Services PMI—each capable of driving volatility in the FX space. These releases arrive at a technically significant moment for USDCAD, which has been under sustained bearish pressure since early February. As both macroeconomic and technical signals evolve, market participants will be watching closely for confirmation of trend continuation or signs of a potential reversal.
Key Economic Events
Thursday 09:30 am (GMT+3) - Switzerland: CPI m/m (CHF)
Thursday 15:30 (GMT+3) - USA: Nonfarm Employment Change (USD)
Thursday 17:00 (GMT+3) - USA: ISM Services PMI (USD)
Technical Analysis
Since peaking at 1.47920 on February 3, USDCAD has exhibited a consistent downward trend, marked by structurally bearish price action and corroborated by momentum indicators. The decline was initiated by a textbook failure swing pattern, where a lower high was followed by a breakdown below the prior swing low at 1.41499—effectively confirming a shift in technical bias to the downside.
Adding to the bearish outlook, the formation of a "Death Cross" — where the 20-period EMA crosses below the 50-period EMA — signals medium-term downside momentum and further validates the prevailing trend.
Momentum indicators continue to reinforce this bearish stance. The Momentum Oscillator remains anchored below the 100 level, while the RSI holds beneath the neutral 50 threshold, both suggesting persistent selling pressure.
That said, the emergence of a bullish divergence between price and momentum may indicate that downside momentum is losing steam. While the broader trend remains negative, this divergence introduces the possibility of a short-term corrective bounce or a consolidation phase before the next directional move.
Potential Upside Targets
Should the bulls take market control, traders may direct their attention toward the four potential resistance levels below:
1.37973: The initial resistance is seen at 1.37973, which reflects the swing high from June 23.
1.38606: The second price target is identified at 1.38606, which corresponds to the daily high marked on May 29.
1.40153: The third target is established at 1.40153, mirroring the high point reached on May 13.
1.42342: An additional price target is estimated at 1.42342, corresponding to the daily low from March 26.
Potential Downside Targets
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
1.35388: The first level of support is set at 1.35388, representing the swing low from June 16.
1.34832: The second support level is identified at 1.34832, reflecting the weekly support, S3, estimated using the standard Pivot Points methodology.
1.33790: The third support level is estimated at 1.33790, representing the 161.8% Fibonacci Extension drawn from 1.35388 to 1.37973.
1.31205: An additional downward target is observed at 1.31205, corresponding to the 261.8% Fibonacci Extension drawn from 1.35388 to 1.37973.
Fundamentals
Canada has dropped a planned tax on large US tech companies like Amazon, Google, Meta, and Apple just before it was set to take effect. The move comes after US President Donald Trump called the tax a "blatant attack" and threatened higher tariffs on Canadian imports. The tax would have charged tech giants 3% on Canadian revenues over $20 million, costing them over $2 billion a year. Canada says it prefers a global solution to taxing digital services and hopes this decision will help restart trade talks with the US, which aims to finalize a new agreement by July 21.
On the other hand, the US private sector unexpectedly lost 33,000 jobs in June, according to ADP, signaling a slowdown in hiring and raising concerns about the strength of the labor market. The report sharply missed expectations and has increased pressure on the Federal Reserve to consider cutting interest rates—something President Trump has repeatedly called for, blaming high rates for rising government debt costs. While economists note that ADP's figures often differ from official data, the weak reading still highlights growing uncertainty. All eyes are now on today's release of the official Nonfarm Payrolls report, which is expected to provide clearer insight into the job market's direction.
Conclusion
With USDCAD trading near key technical levels and sentiment shaped by both domestic and international developments, today's economic releases—particularly the US Nonfarm Payrolls report—could prove decisive. While technical signals continue to favor a bearish outlook, emerging divergence and shifting fundamentals suggest the potential for volatility in either direction. As markets digest fresh labor data and geopolitical shifts, traders should remain alert to rapid changes in momentum and adjust their strategies accordingly.