USD/CAD Strengthens as Market Weighs Trump Tariff Threat and Canadian Jobs Data

USD/CAD Rallies While Traders Brace for Canadian Job Numbers and Trump Tariff Drama

There’s no shortage of drama on the USD/CAD chart these days. After dipping close to the 1.3555 support mark, the USD/CAD forex pair found its groove and pushed back up, catching the eyes of traders who are hungry for a clear direction. The pair’s rebound doesn’t just sit at a random spot—it snapped back from a crucial level that’s been tested multiple times since last fall, signaling restless action and plenty of opinions about what happens next.

Right now, the 1.3700 resistance zone is the big test. It’s a popular spot for both buyers and sellers, loaded with psychological weight in the markets. If buyers manage to muscle past here, the next area to scout is 1.3750, with the 1.3800 level not far off. On the flip side, if 1.3700 holds firm and sellers regain the upper hand, all eyes shift back to 1.3637 and 1.3555, where past support has stopped the bleeding more than once. Analysts say we’re still in a consolidative phase, meaning the pair is carving out its range, but technicals point to a potential upward leg if momentum gets a boost from the headlines.

Geopolitical Risks and Economic Data Steer the Loonie’s Fate

The CAD doesn’t just have technical charts to worry about. Recent news from the political world is shaking up the game. Former President Trump’s pledge to slap a 35% tariff on Canadian goods if reelected has rattled nerves from Toronto to Vancouver. This tariff threat reintroduced a wave of risk aversion focused squarely on the Canadian dollar, inflating the USD in comparison. Currency traders are already building these headlines into their positions, explaining some of the recent moves out of the Canadian dollar and back towards the greenback.

On top of that, the looming Canadian employment report is a massive puzzle piece. Jobs numbers have a history of moving the Canadian dollar in a hurry, especially when surprise results send shockwaves through expectations. If Canada posts a strong employment gain and unemployment inches down, CAD could find real support, maybe even reversing the recent USD/CAD bounce. But if the figures disappoint or signal weakness, traders will likely pile on to the recent Loonie gloom, pushing USD/CAD even higher.

Technical indicators are flashing mixed signals. Some see hints of a double-bottom pattern around the 1.363 level. This formation, if confirmed by price action, usually signals a trend reversal upward. Yet, longer-term charts argue the pair might still be correcting after falling from a medium-term high just shy of 1.48. For now, the outlook stays bearish as long as the 1.4014 resistance holds firm. One level many are watching is the 61.8% Fibonacci retracement at 1.3069 — if the pair ever gets dragged down that far, it could spark a much bigger debate over the Loonie's fate.

For traders, the path forward is all about watching the key levels: a firm break of 1.3700 could send the USD/CAD sprinting toward 1.3800, while any bearish turn below 1.3637 could signal another slip back to recent lows. The Canadian dollar’s next move hinges not just on candlesticks, but on political noise and those all-important Canadian jobs numbers. Buckle up—this ride isn’t over yet.