USDCAD on Friday dropped -0.13% to 1.42880. Week ending 2025-02-07 moved lower by -2.88%. What you need to know.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.13%	-19.3 Pips
Week 2025-02-07	-2.88%	-423.4 Pips
February	-1.38%	-199.4 Pips

Upcoming key events for the new week (London Time)

Wed 01:30 PM CPI Inflation Rate (12-mth)
Wed 01:30 PM CPI Inflation Rate excluding Food and Energy sectors (12-mth)
Wed 03:00 PM Federal Reserve Chair Jerome Powell testifies
Thu 01:30 PM PPI excluding Food and Energy sectors (12-mth)
Fri 01:30 PM Monthly Retail Trade (1-mth)

What happened over the week

In the United States, recent economic data presents a mixed picture. The unemployment rate decreased from 4.1% in December to 4% in January, indicating a slight improvement in the labor market as reported by the Bureau of Labor Statistics. Despite this positive trend, Nonfarm Payroll Employment noticeably decreased to 143K from 256K, suggesting a slowdown in job creation. Average hourly earnings showed growth, rising from 0.3% to 0.5% over the month and from 3.9% to 4.1% year-over-year, which could signal increasing wage pressures. Meanwhile, the U-6 Total, an alternative gauge of labor underutilization, remained constant at 7.5%. Additionally, the U.S. job openings dropped from the prior 8.156 million in November to 7.6 million in December, reflecting potential hiring slowdowns. On the downside, initial unemployment claims rose to 219K from the previous 208K, and unit labor costs surged from 0.8% in Q3 to a flash estimate of 3% in Q4.

In Canada, the unemployment rate marginally improved in January, falling to 6.6% from 6.7% as reported by Statistics Canada. However, the number of new jobs created fell markedly, declining from the previously revised figure of 91K in December to 76K in January, indicating a slowdown in employment growth. Furthermore, average hourly wages on a 12-month basis dipped slightly from 3.8% in December to 3.7% in January. The undercurrents of these metrics suggest a tempered improvement in the labor market.

The recent economic developments have influenced the USDCAD currency pair. As the U.S. labor market data demonstrated some weakness with a decline in payroll jobs and job openings, accompanied by a rise in unemployment claims, these indicators could weigh on the U.S. dollar, contributing to the recent slide in the USDCAD. On the other hand, while Canada’s reduction in job creation might have usually supported weakness in the Canadian dollar, the improvement in the unemployment rate might provide some stability. Economic events about U.S. inflation and interest rates later in the week will be pivotal, considering any signs of monetary policy adjustments by the Federal Reserve, indicating that USDCAD exchange rates could experience further volatility depending on upcoming data and market expectations.

From X (Twitter)

#Employment increased by 76,000 (+0.4%) in January 2025 and the employment rate rose 0.1 percentage points to 61.1%. The #unemployment rate declined 0.1 percentage points to 6.6%.

For more info: https://t.co/lVld9WKyyD pic.twitter.com/CToJna5ttU

— Statistics Canada (@StatCan_eng) February 7, 2025

What can we expect from USDCAD for the new week and what happened on Friday?

USDCAD on Friday dropped -0.13% to 1.43. Price is below 9-Day EMA while Stochastic is falling in oversold zone. For the week ending 2025-02-07, the pair dropped -2.88% or -423.4 pips lower.

Looking ahead, USDCAD looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook looks bearish, immediate support level is at 1.42 (WS1) with break below could see further selling pressure towards 1.41 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.45 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.43 would indicate selling pressure.

For the month of February, USDCAD is down by -1.38% or -199.4 pips lower.

Weekly key levels to watch out:

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