USD/CAD Price Prediction: Defends 50-day SMA support above 1.3700 ahead of Canadian jobs data

• USD/CAD bounces off a multi-week low touched this Friday, albeit lacks follow-through.
• An uptick in Oil prices underpins the Loonie and acts as a headwind amid a softer USD.
• Traders also seem reluctant to place aggressive bets ahead of the Canadian jobs report.

The USD/CAD pair once again finds some support near the 50-day Simple Moving Average (SMA) and stages a modest bounce from the 1.3720-1.3715 region, or a three-week low touched earlier this Friday. Spot prices, however, struggle to capitalize on the move and remain below mid-1.3700s through the first half of the European session.

Meanwhile, the uptick lacks any obvious fundamental catalyst and could be solely attributed to some repositioning trade ahead of the release of Canadian monthly employment details. Any meaningful recovery, however, still seems elusive in the wake of the recent rise in Crude Oil prices, which tends to underpin the commodity-linked Loonie. Furthermore, the emergence of some US Dollar (USD) selling, led by a fresh leg down in the US Treasury bond yields, further contributes to capping gains for the USD/CAD pair. 

From a technical perspective, oscillators on the daily chart have just started gaining negative traction and support prospects for an extension of the recent sharp pullback from the vicinity of the mid-1.3900s, or the highest level since October 2022 touched on Monday. Bearish traders, however, might wait for a sustained break and acceptance below the 50-day SMA pivotal support before placing fresh bets. The USD/CAD pair might then weaken further below the 1.3700 mark and test the 1.3680-1.3675 support zone.

The downward trajectory could extend further towards the mid-1.3600s en route to the 1.3600 round figure. The latter coincides with the technically significant 200-day SMA, which if broken decisively will be seen as a fresh trigger for bearish traders and pave the way for a further near-term depreciating move. 

On the flip side, the overnight swing high, around the 1.3765 region, could act as an immediate hurdle ahead of the 1.3800 mark. A sustained strength beyond will suggest that the corrective decline witnessed since the beginning of the week has run its course and prompt an aggressive short-covering move. The USD/CAD pair might then climb to the 1.3845-1.3850 intermediate hurdle before aiming for the 1.3900 mark. Nevertheless, spot prices remain on track to register weekly losses for the first time in the previous four.

USD/CAD daily chart