The USD/CAD pair has been under pressure on Friday morning ahead of Canada’s job data. It is trading at 1.2787 from 1.2895 high this week.

Canada jobs data ahead

Canada’s economy has dramatically improved as the country continues to recover. Recent data indicates the country’s manufacturing and services PMI improved in February.

On Friday, Canada will publish its current employment data. Analysts expect an over 160k jobs increase. This would mean a strong rebound after February’s 200k job loss.

Analysts also expect reduction of unemployment rate from 6.5% in January to 6.2% in February, and an increase in the participation rate from 65.0% to 65.3%.

This data will be available after the US published substantial numbers. As per the Bureau of Labour Statistics (BLS), the US increased over 600k jobs in February and dropped the unemployment rate to about 3.8%.

Thus, Canada’s strong job numbers mean the bank of Canada may keep its hawkish push. In February, the bank decided to increase interest rates for the first time since the pandemic.

The USD/CAD pair has been in focus after the increased crude oil prices. The rise is inevitable since Canada trades on international markets yearly.

USD/CAD forecast

The daily chart indicates the USD/CAD in a tight range for the past few weeks. It’s trading at a relatively lower level than the year-to-date high of 1.2960. It has also moved slightly above the 25-day and 50-day moving averages while the price is above the ascending trendline shown in blue.

Therefore the pair may continue with the bearish trend after Canada releases its jobs data. If this happens, the next key support level to watch will be at 1.2700.

However, a move above the key resistance level at 1.2900 will indicate a win for the bulls pulling it above the highest this year.

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