USD/CAD: Strong Canadian jobs data caps loonie gains amid tariff fears

USD/CAD faces conflicting pressures as robust Canadian employment figures support the loonie while lingering tariff concerns limit appreciation potential. Canada's labor market showed unexpected strength, with job creation exceeding forecasts and unemployment remaining stable, typically a bullish signal for CAD. However, ongoing trade policy uncertainty and potential US tariff implementation continue to weigh on Canadian dollar sentiment, given Canada's significant trade exposure to the US market. The pair appears range-bound as these opposing forces create a tug-of-war dynamic. Technical analysis suggests immediate resistance at recent highs, while support emerges from the strong employment backdrop. Traders should monitor developments in US-Canada trade relations and any Bank of Canada commentary on how external risks might influence monetary policy decisions. The employment strength could provide a floor for CAD, but tariff implementation would likely trigger sharp USD/CAD upside.