USD/CAD Price Analysis: Picks up bids beyond the 1.3700 mark, eyes on US, Canadian employment data

• USD/CAD manages to stage a rebound near 1.3720 on Friday.
• The pair holds above the 50- and 100-hour EMAs with a bullish RSI.
• The immediate resistance level is located at 1.3757; 1.3685 acts as an initial support level.

The USD/CAD pair holds positive ground around 1.3720 during the early European session on Friday. The uptick of the pair is bolstered by the renewed US Dollar (USD) demand, along with a decline in oil prices, which weigh on the commodity-linked Loonie.

Market players await the employment data from both the US and Canada. The US Nonfarm Payrolls are expected to rise by 170K while the US Unemployment Rate is estimated to decline to 3.7% from 3.8%. Also, the Canadian Net Change in Employment is expected to gain 20,000 in September. These events could trigger the volatility in the market and give a clear direction to the USD/CAD pair.

From the technical perspective, USD/CAD holds above the 50- and 100-hour Exponential Moving Averages (EMAs) on the four-hour chart, which supports the buyers for the time being. Furthermore, the Relative Strength Index (RSI) is located in the bullish territory above 50, which means the path of the least resistance of USD/CAD is to the upside.

Any decisive follow-through buying above the upper boundary of the Bollinger Band of 1.3757 will pave the way to a high of October 5 at 1.3785. The additional upside filter to watch is near a high of March 24 at 1.3805. Further north, the pair will see a rally to a high of March 10 at 1.3860.

On the downside, the initial support level is located near the lower limit of the Bollinger Band of 1.3685. A break below the latter will see a drop to the next downside stop at 1.3636 (the 50-hour EMA). The key contention level is seen at the 1.3590-1.3600 region, representing the confluence of the 100-hour EMA and a psychological round figure. Further south, 1.3543 will be the next level to watch.

USD/CAD four-hour chart