Loonie jumps as hot Canada jobs print drives USD/CAD into 100- and 200-day MA test
A stronger-than-expected Canadian labor report sent USD/CAD lower to a technical inflection, with the pair probing a tight confluence around the 100- and 200-day moving averages as traders weigh a break versus a bounce.
Canada labor beat lifts CAD
Canada’s November employment surprised to the upside, with total employment up 53.6k and the jobless rate dropping to 6.5% from 7.0%. A softer participation rate (65.1% vs 65.3%) helped the headline unemployment rate, and gains were concentrated in part-time work for a second straight month (+63.0k after +85.1k previously), tempering the signal on underlying labor strength.
The print sparked a rally in the Canadian dollar, pushing USD/CAD lower as rate markets nudged longer-dated policy expectations higher, with some desks flagging faint odds of additional tightening risk into 2026. Broader risk sentiment and North American yields remain secondary drivers into the New York session.
Technical picture: Confluence support in focus
USD/CAD is testing a dense support zone where multiple signals align:
- 100-day MA: ~1.3901
- 200-day MA: ~1.3888
- 61.8% retracement of the rise from the mid-September low: clustered in the same 1.3886–1.3901 area
Price briefly slipped beneath the band to a session low near 1.38846 before stabilizing. This remains a pivotal area for momentum traders and dip buyers alike.
What would confirm the next move?
A sustained break below the confluence would open the door to additional downside momentum as systematic flows and breakout strategies engage. Conversely, a rebound and close back above the higher 100-day MA (~1.3901) would ease immediate downside pressure and could draw a corrective push toward ~1.3923–1.3935.
Market snapshot
- USD/CAD sinks to test a clustered support zone at 1.3886–1.3901 (100/200-day MAs and key Fibonacci).
- Canada employment +53.6k; unemployment falls to 6.5% from 7.0% as participation dips to 65.1%.
- Part-time hiring leads for a second month (+63.0k after +85.1k), clouding the signal on labor tightness.
- Rates markets edge up longer-dated policy expectations, with some attention on 2026 scenarios.
- Intraday low prints around 1.38846; price action sensitive to confluence support behavior.
Trading levels to watch
- Support: 1.3886–1.3901 confluence (61.8% Fib, 200-day MA, 100-day MA)
- First resistance: Close back above ~1.3901 to reduce downside pressure
- Near-term rebound zone: ~1.3923–1.3935 on a corrective squeeze
Context and positioning
Into the data, positioning had skewed defensively after a multi-week USD/CAD grind higher, leaving the pair vulnerable to a positive CAD shock. With the move now testing longer-term trend gauges, liquidity around the MA cluster is likely to dictate intraday volatility. Oil—historically correlated with the loonie—and U.S. rate dynamics remain watch factors as North American trading develops, BPayNews notes.
FAQ
Why did USD/CAD fall after the Canada jobs report?
Stronger-than-expected hiring and a drop in the unemployment rate boosted the Canadian dollar, pushing USD/CAD lower. Rates markets nudged longer-dated policy expectations higher, supporting CAD on the margins.
Which technical levels matter most right now?
The 1.3886–1.3901 zone is pivotal, where the 100-day MA (~1.3901), 200-day MA (~1.3888), and the 61.8% retracement of the mid-September advance converge. A decisive break or hold here likely sets the next directional leg.
What would signal a bearish continuation?
A sustained move below the confluence support, with follow-through selling and acceptance under the 200-day MA, would increase the odds of further downside as momentum strategies kick in.
What could trigger a rebound?
Regaining and holding above the 100-day MA would reduce immediate bearish pressure and could invite a corrective bounce toward ~1.3923–1.3935.
How do oil prices and U.S. yields affect USD/CAD?
Higher oil prices generally support the CAD given Canada’s energy exports, while rising U.S. Treasury yields can bolster the USD. Shifts in either can add to or offset the CAD’s reaction to domestic data.
Last updated on December 5th, 2025 at 05:51 pm
