The Canadian dollar is consolidating around 1.3830, after recovering from lows driven by a poor Canadian jobs report showing 65,500 jobs lost in August. Expectations for a Bank of Canada rate cut on September 17 are strong (92% probability), yet markets still view the Fed as more likely to move aggressively.
USD/CAD is capped below the 200-day SMA (1.4021) and hovering near the 50-day SMA (1.40), indicating technical indecision. While fundamentals point to loonie weakness, technical resistance at 1.39 is firm. The outlook is neutral to slightly bearish for USD/CAD, with further gains likely capped.
