The Canadian Dollar is making a slight gain against a mixed USD as the week begins. In October, Canadian employment data surpassed expectations with an addition of 66.6k jobs. However, the details reveal a decline in unemployment and wage increases driven by part-time work, even though total hours worked remained soft. This information supports the Bank of Canada’s steady policy outlook and has slightly narrowed 2Y swap spreads by about 10 basis points. Technical analysis of the USD/CAD chart shows that the USD’s upward trend has paused near the 1.4150/60 resistance level. The momentum for the USD appears to be weakening as it drops below the support levels of 1.4080 and 1.4040. This may lead to further slight decreases in the USD. A psychological support level exists at 1.4000, with a broader support range between 1.3890 and 1.3925. If the price falls below this range, larger declines might follow.

Impact of Canadian Employment Data

The Canadian employment report from Friday, November 7, 2025, was better than expected and strengthens our belief that the Bank of Canada will maintain its current policy. The strong jobs data helps the Canadian dollar by narrowing the interest rate gap with the United States. The fundamentals provide a solid base for the currency at this time. This positive outlook is further reinforced by Canada’s inflation rate for October 2025, which remained steady at 2.8%. This keeps pressure on the central bank to avoid making early rate cuts. With WTI crude oil prices steady above $80 per barrel, the economic environment for the loonie is strong. Together, these factors suggest limited upward movement for the USD/CAD pair in the near future. From a trading perspective, the pause in USD/CAD near the 1.4150 resistance level means selling out-of-the-money call options could be a good strategy. For example, selling December 2025 calls with a strike price of 1.4200 could allow traders to collect a premium while the pair struggles to rise. This strategy bets on the pair staying below this important technical ceiling in the weeks to come.

USD/CAD Trading Strategy

We are closely monitoring the 1.4000 level as a key psychological support for the US dollar. If the price decisively breaks below this level, we might see a significant drop toward the 1.3900 support zone, a level last seen in late September 2025. Looking back at similar situations in early 2024, failing to break major resistance often led to a quick reversal to the next significant support level. Create your live VT Markets account and start trading now.

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