USD/CAD Forecast: 147K NFP and Oil Slide Signal More Downside Below 1.36

The US Dollar had a small bounce after the June Non-Farm Payrolls (NFP) report came in at 147K versus 111K expected. While that gave...

Written by: Arslan Butt • Friday, July 4, 2025 • 2 min read

• Last updated: Friday, July 4, 2025

Quick overview

The US Dollar experienced a brief bounce after the June Non-Farm Payrolls report, but overall data was unfavorable for bulls.
Unemployment rose to 4.1%, and average hourly earnings fell short of expectations, indicating a soft labor market.
Canada's trade deficit improved slightly, but weak oil prices continue to hinder the Canadian Dollar's performance.
The USD/CAD pair remains in a bearish channel, with key resistance at 1.3624 and support levels at 1.3539, 1.3505, and 1.3467.

The US Dollar had a small bounce after the June Non-Farm Payrolls (NFP) report came in at 147K versus 111K expected. While that gave the dollar a brief pop, the rest of Thursday’s data was not so good for bulls.

Unemployment rose to 4.1%, the highest since late 2021, and average hourly earnings was 0.2% versus 0.3% expected. That’s a soft labor market with less wage pressure—just what the Fed wants to see before cutting rates.

Factory orders jumped 8.2% in May but services activity cooled, with the ISM Services PMI stuck at 50.8, just above contraction. And with weekly jobless claims still at 233K, the dollar is on the defensive overall—especially against commodity currencies like the Canadian Dollar.

Canada’s Trade Deficit Narrows, But Oil Drags on CAD

Canada’s June trade deficit was –5.9B, slightly better than expected due to improved exports. But that’s not enough to lift the Loonie.

Why? Oil is still weak and that’s a big drag on CAD. Canada’s economy is heavily dependent on energy exports and falling crude hurts demand for the currency. Until we see a meaningful bounce in oil, CAD gains will be limited—even if US data softens.

That’s why USD/CAD isn’t breaking down sharply despite broad USD weakness. Instead it’s stuck in a bearish channel where rallies are sold and dips are bought.

Technical View: Bearish Channel Intact

From a chart perspective, USD/CAD is consolidating at 1.3571, right at the bottom of the downward sloping channel that’s been in place since late June. Price is making lower highs and lower lows—a classic bearish trend.

USD/CAD Price Chart - Source: Tradingview — USD/CAD Price Chart – Source: Tradingview

50-period EMA at 1.3615 is capping rallies
Price failed to break the channel top at 1.3624-1.3640
MACD is flat with weak bullish momentum
Key support at 1.3539, then 1.3505 and 1.3467 if it breaksUnless we close above 1.3640, I’m bearish. I’m looking for MACD crossovers, bearish engulfing candles or clean rejections at EMA to trigger selling.

Trade Setup:

Bias: Bearish below 1.3624
Sell Zone: Below 1.3585
Targets: 1.3539, 1.3505, 1.3467
Stop-Loss: Above 1.3640
Indicators to Watch: EMA rejection, MACD weakness, price action at channel boundary

From my experience this is a low-volatility grind that rewards patience and precision—good for trend followers but tough for aggressive scalpers.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.