On Friday, the USD/CAD pair remains near a three-week low, trading below the key 1.3600 level.
The U.S. dollar is struggling to extend its gains following yesterday's stronger-than-expected Nonfarm Payrolls (NFP) report, as persistent fiscal concerns weigh on sentiment. The tax and spending reduction bill proposed by President Donald Trump cleared its final hurdle in Congress on Thursday. The legislation is estimated to increase the U.S. national debt by 3.4 trillion dollars and significantly widen the federal deficit, which is limiting the dollar's recent recovery from multi-year lows and exerting downward pressure on the USD/CAD pair.
At the same time, crude oil prices are facing difficulty attracting buyers amid expectations that OPEC+ will raise production by 411,000 barrels per day in August. 
Nonetheless, oil prices are holding onto weekly gains, supporting the commodity-linked Canadian dollar and helping to cap the upside in USD/CAD. Persistent uncertainty over trade relations, the approaching weekend, and thin market conditions due to the U.S. Independence Day holiday may also discourage traders from initiating aggressive directional positions.
From a technical perspective, the formation of a descending channel indicates that the downtrend remains intact. Combined with negative oscillator readings, this suggests that the path of least resistance for the pair is to the downside. However, bearish traders are advised to wait for a sustained break below the channel support before entering new short positions.
