The USD/CAD forecast shows bulls at the front as the Canadian dollar stays weak after downbeat domestic employment figures. Meanwhile, the dollar firmed against the loonie ahead of crucial US inflation figures.

The Canadian dollar ended last week down after employment figures solidified bets for a massive Bank of Canada rate cut. Notably, Canada’s economy added 50,500 jobs compared to a forecast of 24,700. However, market participants focused more on the unemployment rate which soared from 6.5% to 6.8%, well above estimates. 

The surge in unemployment caused a shift in rate-cut expectations. Major banks in Canada upgraded their forecasts from a 25-bps cut to a 50-bps cut. At the same time, a Reuters poll revealed that most economists expected a 50-bps Bank of Canada rate cut this week.

On the other hand, the greenback fluctuated on Friday after a mixed employment report. Similar to Canada, US job growth increased, but unemployment rose. Figures revealed that the economy added 224,000 jobs in November, beating estimates of a 195,000 increase.

However, the unemployment rate rose from 4.1% to 4.2%. Initially, the unemployment news led to a surge in rate cut expectations, which weighed on the dollar. However, it recovered as the focus shifted to the resilient economy. This week, traders will watch the US consumer inflation report for more clues on Fed rate cuts.

USD/CAD key events today

Market participants do not expect any key reports from Canada or the US today. Therefore, the pair might consolidate.

USD/CAD technical forecast: Bulls stall near 1.4150

USD/CAD 4-hour chart

On the technical side, the USD/CAD price has paused after breaching the 1.4150 resistance level. It trades well above the 30-SMA, showing bulls have a strong lead. At the same time, the RSI trades near the overbought region, indicating solid bullish momentum. 

Although the price has chopped through the SMA, it has maintained a bullish trajectory, making higher highs and lows. At the same time, the price has respected a bullish trendline, bouncing higher after retesting the line. The recent move came from this trendline, where bullish momentum surged, pushing the price beyond a solid resistance level. Bulls might struggle near the 1.4150 key level for a while before making a new high.

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