The Canadian dollar remains under pressure from weak macroeconomic data. In July, the unemployment rate stayed at 6.9%, while employment declined by 41,000 jobs (–0.2%), bringing the overall employment rate down to 60.7% (–0.2%). The sharpest drop was seen among youth aged 15–24 (–1.2%), while the 25–54 age group showed only a marginal decline of –0.1%.

By sector, the steepest employment losses occurred in information, culture & recreation (–29,000 jobs, or –3.3%) and construction (–22,000 jobs, or –1.3%). However, average hourly wages rose 3.3% to CAD 36.16, matching June’s 3.2% growth.

Prime Minister Mark Carney stated that the government’s focus remains on finding new opportunities for Canadian businesses and workers abroad rather than on U.S. trade issues. He noted he has not spoken with U.S. President Donald Trump since last Thursday’s hike in general tariffs on Canadian goods from 25.0% to 35.0%.

The U.S. dollar index (USDX) edged higher to 98.30 as markets await U.S. CPI data at 14:30 (GMT+2). Forecasts call for annual inflation to accelerate to 2.8% (headline) and 3.0% (core), both above the Fed’s 2.0% target.

Markets are also watching for potential leadership changes at the Federal Reserve. While it’s still unclear who will replace Jerome Powell, analysts expect Trump to favor a dovish candidate, arguing that rate cuts have been delayed for months and now require swift, decisive action.

Support and Resistance Levels

On the daily chart, the pair is consolidating near the resistance line of the downward channel between 1.3850 and 1.3400.

Technical indicators are weakening their buy signals:

  • The Alligator’s EMAs are narrowing toward the downside.

  • Fast EMAs remain above the signal line.

  • AO histogram shows corrective bars in positive territory.

On the daily chart

Resistance: 1.3850, 1.4020

Support: 1.3710, 1.3560

Trading Scenarios

    • Entry: 1.3710

    • Take Profit: 1.3560

    • Stop Loss: 1.3800

    • Timeframe: 7 days or more

      Primary Scenario – Sell Stop:

    • Entry: 1.3850

    • Take Profit: 1.4020

    • Stop Loss: 1.3770

      Alternative Scenario – Buy Stop:

Key Levels: 1.3560, 1.3710, 1.3850, 1.4020