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EN
10 November 2025,04:05
Daily Market Analysis New
10 November 2025, 04:05
*Strong Labour Market Supports CAD – October employment surged +66,600, unemployment fell to 6.9%, and wages rose 3.5% YoY, prompting market reassessment of near-term BoC easing.
*BoC Likely to Hold Rates – Economists from Desjardins and CIBC now expect the Bank of Canada to keep rates steady in December, shifting from earlier dovish expectations.
*Offsetting External Headwinds – U.S. tariffs and global risk remain concerns, but domestic resilience is helping the loonie absorb these pressures.
Market Summary:
The Canadian dollar strengthened modestly this week, buoyed by robust domestic fundamentals that have prompted markets to reassess expectations for near-term Bank of Canada easing. October’s stellar employment report showing a 66,600 surge in jobs, a drop in the unemployment rate to 6.9%, and wage growth accelerating to 3.5% year-on-year has positioned Canada as one of the few advanced economies demonstrating clear labor-market resilience. Economists from Desjardins and CIBC now anticipate the BoC will hold rates steady in December, a notable shift from prior dovish bets.
This strength is helping the loonie offset external headwinds stemming from U.S. trade tensions and global risk volatility. While U.S. tariffs remain a lingering concern for Canadian exporters, particularly in construction and manufacturing, the domestic data suggest the economy is absorbing cost pressures more effectively than expected. The currency has also found indirect support from a softer U.S. dollar and firmer crude-oil prices, amplifying its role as a commodity-linked outperformer among G10 peers.
Going forward, the loonie’s trajectory will depend on whether domestic strength persists amid global uncertainty. If labor and wage gains translate into firmer inflation, policymakers are likely to maintain a cautious tone, effectively anchoring CAD near current levels. Conversely, renewed tariff escalation or a rebound in the U.S. dollar could reintroduce volatility but for now, the Canadian dollar stands on relatively solid macro footing.
Technical Analysis
USDCAD, H4:
The USD/CAD pair has recently broken below its short-term ascending trendline, suggesting that bullish momentum is starting to fade after the strong rally seen in late October. The price faced a clear rejection near the 1.4160 level, which aligns with a major horizontal resistance area and the upper boundary of the rising channel. Following that rejection, the pair has moved lower and is now hovering around the 1.3985–1.4070 region, where both the 50-period and 100-period moving averages converge. This zone is acting as a short-term support, but a decisive close beneath it could confirm a deeper bearish correction, potentially driving the price down toward the next key support levels at 1.3985 and 1.3910.
Momentum indicators also reinforce the weakening structure. The RSI has dropped sharply from overbought territory and is now below the midline, reflecting strong selling pressure and the likelihood of continued downside movement unless it manages to recover above 45. Similarly, the MACD has formed a bearish crossover, and the histogram is expanding below the zero line, indicating growing downside momentum.
Resistance Levels: 1.4070, 1.4160
Support Levels: 1.3985, 1.3910
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