USD/CAD is at a critical juncture as it tests key Fibonacci support ahead of the upcoming US jobs data. The pair has been on a downward trend for several weeks, reflecting the Canadian dollar's strength. It is now approaching the 61.8% Fibonacci retracement level, which has acted as a support since late October.
The pair's movement could signal further Canadian dollar strength or a potential rebound. If the support level breaks, USD/CAD could drop to around C$1.3750. Conversely, if the support holds, it might rebound towards C$1.4300. The 10-day exponential moving average (EMA) is also a key resistance level, and staying below it could indicate a continued decline.
Michael Kramer of Mott Capital Management notes that cooler Canadian inflation could support a rebound towards C$1.43, while C$1.3970 remains a critical downside level to monitor. With the US midterm elections behind us and important jobs data on the horizon, the pair is at an inflexion point.