Confusing Moves in USDCAD as USD Strengthens— Chart Levels to Monitor

[Redator]

North-American currencies are leading majors this morning with the employment data beating expectations in the US and Canada.

US Non-Farm Payrolls Came at 139K vs 130K expected - but it seems like the market is extrapolating the info even more as ADP missed in the beginning of the week: The greenback is rallying strongly and risk assets are enjoying from the tone.

With Canadian data coming in at +8.8K vs -15K expected, the employment data from the Canuck has been surprising to the upside for a few months now.

The USD is currently leading the Major Forex board, notably up 0.90% against the JPY and only up a small 10% against the CAD.

The surprise was much bigger in Canada although the thesis is markets have been selling US Dollars since the beginning of the year, and this accumulation of positions puts many traders in the same trades.

With most key players acting on the same side of the market, the reaction is swift when data surprises, especially with US Markets rallying strongly towards yesterday's highs and beyond - The S&P just crossed 6,000.

USDCAD 4H and 1H Chart analysis

USDCAD 4H

/media/images/Screenshot_2025-06-06_at_10.08.15AM.width-1400.png

USDCAD 4H Chart, June 6, 2025 - Source: TradingView

USDCAD had been descending since the 13th of May and momentum is starting to stall - Momentum is bouncing from oversold.

Price Action from the 26th and 28th of May allow for the observation of a 4H Descending channel which isn't too steep - a basis for more prolonged price action.

Although, the stabilization around the Pivot Zone (1.3675 to 1.3686) points toward a retest of the higher band, met with the 4H MA 50.

It will be key to see how markets react if prices do get there.

Let's take a closer look.

USDCAD 1H

/media/images/Screenshot_2025-06-06_at_9.52.05AM.width-1400.png

USDCAD 1H Chart, June 6, 2025 - Source: TradingView

USDCAD failed to maintain its 1H steeper descending channel, formed toward the end of May, as yesterday's consolidation did not lead to a rejection of the higher band.

As a matter of fact, prices are forming an inverse Head & Shoulders pattern, further supported by the 1H MA 50.

The pattern measured move points to a move towards the 1.3740 resistance zone rejected on Tuesday, in confluence with a retest of the 1H MA 200 & the 4H MA 50.

There is basis for movement as the RSI is slowly going to overbought but still far from the zone.

Prices will need to move further, probably on more USD Strength or lack thereof, as we have formed two consecutive long-legged doji candles.

Safe Trades!

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© {CURRENT_YEAR} OANDA Business Information & Services Inc.