Several negative data points were released this week for the US dollar, led by the ADP Non-Farm Employment Change, which posted its lowest reading since March 2023 at just 37K. Additionally, the Non-Manufacturing PMI fell below the key 50 level, recording 49.9. These readings add further downside pressure on the US dollar. On the other hand, the Bank of Canada kept interest rates steady at 2.75%.

Technical Outlook on the Daily Chart

A graph of a candle stick AI-generated content may be incorrect.

Figure 1: USDCAD Daily Timeframe, TradingView

The US Dollar against the Canadian Dollar (USDCAD) is trading in a general downtrend, forming lower highs and lower lows, confirming the bearish momentum.

Traders should monitor any corrective rise toward the 1.38164 level as a potential opportunity to continue the downtrend and target 1.36015.

However, a break and daily candle close above 1.38611 would invalidate the bearish scenario.

Note:

Markets are anticipating the US and Canadian employment data due on Friday, June 6, 2025. Significant volatility is expected upon their release, especially for the USDCAD pair.