FxWirePro: USD/CAD trends higher, but faces potential pitfalls

• USD/CAD strengthened  on Wednesday as greenback rose after stronger than expected labor market reading.

• The Labor Department said on Wednesday that weekly initial jobless claims dropped by 16,000 to a seasonally adjusted 199,000, the lowest in a month, and below the 220,000 estimate of economists.

• Minutes from the Fed’s December 9–10 meeting showed the central bank agreed to cut interest rates only after a deeply nuanced debate over the risks facing the U.S. economy.

•The Federal Reserve’s policy trajectory is expected to set the tone for global markets in 2026, after recent economic data and expectations of a more dovish Fed chair led investors to price in further rate cuts.

•  Trading volumes remained thin in the holiday-shortened week, with markets closed on Thursday for New Year's Day.

•  Immediate resistance is located at 1.3730(38.2%fib), any close above will push the pair towards 1.3782 (SMA 20).

• Support is seen at 1.3641(Daily low) and break below could take the pair towards 1.3621(Lower BB).

Recommendation: Good to sell  around 1.3740 with stop loss of 1.3850  and target price of 1.3650