Canadian Dollar under pressure from soft employment figures – CAD outlook

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The Canadian Dollar is under renewed selling pressure, currently ranking the second-worst performing major currency in 2025 after the US Dollar.

The combination of a degrading domestic economy and ongoing tariff uncertainty continues to weigh on the loonie, leaving traders skeptical about near-term upside.

Canada’s most recent GDP release confirmed sluggish growth, underscoring the drag from weaker domestic activity., with this bringing Bank of Canada cuts back to the table (close to 90% priced in) in spite of a core inflation still at 3.0%

A surprising upbeat employment data in June did not generate enough traction for Canada to maintain its employment at higher levels, particularly when looking at Friday's -60K release.

Canadian Employment in 2025, September – Source: TradingEconomics, Statistiques Canada

The data reflects how US tariff pressures slow hiring momentum and tighten activity across key sectors. The unemployment rate in Canada is now at 7.1%, and its growth in the past month is something to watch.

With these trends converging, the loonie remains vulnerable. This phenomenon aggravates, especially as European currencies in the GBP, CHF, and most strongly the Euro, have shown their best performance in years.

Many CAD pairs at are key levels, let's spot a few of them to see if technicals could assist the Canadian currency – USDCAD / EURCAD / CADJPY.

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Canadian Dollar pairs technical analysis

USDCAD – approaching its main resistance

USDCAD 4H Chart, September 9, 2025 – Source: TradingView

The North-American pair has been stuck in a 700 pip range since the 4th of September and despite not breaking the previous monthly highs yet, Greenback buyers are making a push.

The momentum is pretty strong and not overbought yet which may be enough to at least test the 1.3854 Friday highs.

Traders might still await more clarity from Data before pushing the US Dollar higher as the USD re-enters its range.

Levels to place on your USDCAD charts:

Resistance Levels:

• 1.3925 August 22 highs (most recent peak)
• 1.3850 to 1.3860 Main resistance (1.3854 Friday highs)
• May Highs 1.40185

Support Levels:

• immediate Pivot 1.38 Handle +/- 150 pips
• Key longer-term pivot Zone 1.3750
• Main Support Zone 1.3675 to 1.3686

EURCAD – just made new highs but momentum slows

EURCAD 4H Chart, September 9, 2025 – Source: TradingView

Despite being at the pairs' yearly highs, RSI momentum is indicating a short-term switch in Momentum in EURCAD.

The Euro had rebounded spectacularly from August lows against other majors, which attracted further momentum in the pair after last Friday's Canadian data. The yearly peak attained this morning is at 1.6258.

Sellers will have to show up in the pair to complete an ascending wedge formation, with a failure to do so pointing to a test of the July 2009 1.63 resistance zone, a level not seen in over 16 years.

Watch for the current reactions as short-term mean reversion is bringing the pair below August highs. The immediate 8H candle is a doji and key Moving Averages are holding almost 1,000 pip below.

Levels to place on your EURCAD charts:

Resistance Levels:

• 1.6258 current highs
• 1.62 and Yearly highs resistance
• 1.63 psychological resistance
• 1.6320 July 2009 highs

Support Levels:

• 1.61 Key pivot zone (confluence with 50-period MA)
• Support for higher trend 1.59
• July Lows around 1.58

CADJPY – Broke its upward trend from May but arriving at key support

CADJPY 8H Chart, September 9, 2025 – Source: TradingView

The Loonie was looking strong against the JPY which had also been hurting from diverging rates – However, a double top marked in the pair led to a strong selloff.

Since last Friday, sellers have brought the pair back to its immediate support at the 106.35 zone (+/- 50 pips) and undecisive mean-reversion might be looking to form.

With Markets awaiting for key US data, FX might be stuck until then.

Buyers failing to hold the immediate support would point to further downside in the pair.

Levels to place on your CADJPY charts:

Resistance Levels:

• Pivot Zone and key Moving averages 107.00
• September highs 108.00
• 2025 High resistance 108.70 to 109.00

Support Levels:

• Immediate Support 106.35
• Main Support 105.00
• Next key Support/Pivot 103.30 to 103.80

Safe Trades!

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