Loonie rallies after Canada adds 54,000 jobs in major employment beat

[Ben Graham]

Some change is starting to appear for Canada after consecutive rough years.

Subject to a red-hot post-COVID boom, the Land of the Maple Syrup had severely tightened its policy rates and immigration rules, leading to a consecutive trough in activity starting in 2024.

To add to that, US President Trump’s protectionist policies placed huge tariffs on key Canadian exports, including Lumber, Aluminium, and many others, damaging demand for Canada's cyclical economy and its prospects for growth.

Given that growth prospects are essential for inciting business investment and hiring, it is clear why Canada struggled quite a bit under such pressure.

But with peak fear subsiding and in the absence of an actual trade deal, Canadian data is bouncing suddenly, and the CAD now leads its FX peers on the session.

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Morning FX Performance, pre Core PCE (9:03 A.M.) December 5, 2025 – Source: TradingView

The shock came this morning with the publication of their third consecutive beat in Employment, posting a gain of +53.6K jobs (vs -5K exp).

This also dropped the Unemployment rate considerably, from 7.0% to 6.5%.

While most of the gains have been in the part-time economy, this is not entirely sub-optimal, as Canada's part-time and seasonal labor market is substantial, with winter and subsequent summer jobs solidifying Canada's labor picture.

This strong surprise combines with recent beats in GDP and Housing data.

Is Canada on the rise again, as the Bank of Canada looks to be done with its rate cuts (currently at 2.25%)?

Canadian interest rate futures are already beginning to price hike premiums in 2026!

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Details of the Canadian Employment report – December 5, 2025

We'll take a look at intraday charts for USD/CAD and EUR/CAD to see how important the shift was for the Loonie.

Read More:

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USD/CAD 4H Chart

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USD/CAD 4H Chart. December 5, 2025– Source: TradingView

The North-American pair is reaching levels not seen since mid-September as USD/CAD was breaking higher on failed trade deal negotiations.

Since November 25, the pair has reversed harshly after forming a double top, bearish Moving Average crosses and now testing Key levels.

On the verge of breaking its 1.39 (+/- 200 Pips) Major support zone, there won't be much to support the pair on a break lower before 800 pips below at 1.38.

Momentum is a bit oversold which can lead to consolidation, so watch how things develop with the soon releasing Core PCE.

Levels of interest for USD/CAD Trading

Resistance Levels

• 1.3930 Mini-resistance
• 1.40 Major Pivot acting as resistance
• Cycle highs 1.4143 and Double top
• Resistance between 1.4120 to 1.4145
• Key resistance 1.4250

Support Levels

• Major Support 1.3870 to 1.39 (breaking)
• 1.38 Major support +/- 150 pips
• August range support 1.3750
• 1.3550 Main 2025 Support

EUR/CAD 8H Chart

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EUR/CAD 8H Chart. December 5, 2025– Source: TradingView

The rally in EUR/CAD in 2025 has been relentless, particularly when looking how weak the Loonie got in recent years.

Up from 1.46 to 1.6490 (Levels not seen since 2009) in just a year, the momentum had been a one way flow.

Things are starting to change however, with the current range (1.6130 to 1.63) lasting long enough to break below the 2025 upwards trendline.

Now testing the higher timeframe pivot, EUR/CAD sellers will want to push for a weekly close below 1.6120 to confirm a break-down.

Failing to do so maintains the two week range.

Levels of interest for EUR/CAD Trading

Resistance Levels

• 1.62 Mid-range Resistance
• 1.6258 MA 50 and 200
• July 2009 Highs around 1.6350
• August 2025 Highs 1.64697

Support Levels

• 1.6150 Range lows & Higher timeframe Pivot (testing)
• 1.6050 Minor Support
• Support for higher trend 1.5950

Safe Trades!

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