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USD/CAD Falls to 1.3800 as Dovish Fed Outlook, Trade Tariff Risks Deter Dollar

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  • August 18, 2025
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USD/CAD dropped towards 1.3800 in Monday’s Asian session as dovish hopes surrounding the Federal Reserve’s September policy meeting dented the US Dollar. Weaker US economic reports, such as falls in consumer sentiment, and slower retail sales growth, solidified expectations for a Fed rate cut. Meanwhile, the Trump administration’s widened tariffs on steel, aluminum, and semiconductor imports further clouded the US outlook. The Bank of Canada, in contrast, has less need to rush policy easing, with its trimmed mean inflation maintaining at 3% in June, leading it to remain cautious notwithstanding the recent rate cuts. KEY LOOKOUTS • Weaker US data reinforces market expectations of a September Federal Reserve rate cut. • Trump’s extension of tariffs on steel, aluminum, and semiconductors has the potential to spur additional economic headwinds. • Canada’s trimmed mean inflation at 3% dampens pressure for the Bank of Canada to accelerate rate cuts. • The pair is near 1.3800, losing impetus following two successive days of advances, with sentiment leaning against the US Dollar. USD/CAD dipped lower to the vicinity of 1.3800 on Monday as dovish speculation about the Federal Reserve’s policy trajectory put pressure on the US Dollar. Downbeat US data, such as decreased consumer sentiment and weaker retail sales, contributed to rate cut speculation in September, while freshly widened US tariffs on steel, aluminum, and semiconductors posed additional negative risks. Conversely, the inflation of Canada is still sticky at 3% based on the trimmed mean metric, leaving the Bank of Canada with not much hurry to re-start easing after its July rate reduction, thus offering some relative support to the Canadian Dollar. USD/CAD fell to close to 1.3800 as dovish Fed hopes and softer US data weighed on the Dollar. That said, Canada’s solid 3% trimmed mean inflation took the heat out of further aggressive BoC rate cuts, providing some support to the Loonie. • USD/CAD fell back to close to 1.3800 in Monday’s Asian trading after two consecutive days of gains. • Dovish Fed expectations increased with weaker US consumer sentiment and softer retail sales information hinting at a September rate cut. • Michigan Consumer Sentiment Index fell to 58.6 in August, below expectations of 62.0 and from July’s 61.7. • US Retail Sales slowed, increasing 0.5% in July compared to 0.9% in June, affirming cooling demand. • Trump administration widened tariffs on steel, aluminum, and semiconductor imports, introducing economic uncertainty. • Trimmed mean inflation in Canada was at 3% in June, remaining wary of the Bank of Canada even after a July cut to 2.75%. • Relative policy divergence between the Fed and BoC favored the Canadian Dollar versus the US Dollar. • The USD/CAD is trading around 1.3800 on a change in market mood based on expectations about monetary policies in the US and Canada. Recent US statistics, such as diminished consumer sentiment and decelerating retail sales, have spurred speculation that the Fed could proceed with a rate cut in September. Concurrently, the Trump administration’s announcement of expanding tariffs on steel, aluminum, and semiconductors has placed increased pressure on the economic picture, worrying traders and investors. USD/CAD DAILY PRICE CHART SOURCE: TradingView Canadian inflation continues high, with the Bank of Canada’s trimmed mean gauge still at 3% in June. Although the central bank reduced its policy rate to 2.75% in July, policymakers have taken a cautious tone on future action. Persistent service prices and risk premia embedded in global trade tensions make it less likely that the BoC will be in a hurry to offer further easing. This conservative position lends the Canadian Dollar a relative strength, even as underlying economic woes continue to unfold in both economies. TECHNICAL ANALYSIS USD/CAD is respecting the 1.3800 psychological level, where nearby support is apparent. A consistent break below this can open up more losses towards the 1.3760–1.3740 area. To the upside, resistance lines up around 1.3840–1.3860, followed by the 1.3900 handle, which continues to be a major hurdle for buyers. The general bias remains tilted in favor of weakness as long as the pair remains below the 1.3900 handle, with the traders keeping a keen eye on whether the pair can hold at support or continue its corrective trend. FORECAST If USD/CAD can hold at or above the 1.3800 support region, a bounce could be observed towards the 1.3840–1.3860 resistance zone. A clean break above this range would likely set the stage for a test of the 1.3900 handle, which is still a major obstacle for additional bullish pressure. Improved US data or any alteration in Fed speak away from imminent rate cuts could also be a source of support for the US Dollar, pushing the pair higher. Conversely, a failure to hold above 1.3800 would probably attract additional selling pressure, taking the pair down to 1.3760 and then 1.3740 levels. A clean break below these supports might prolong the fall towards 1.3700, indicating greater weakness in the near term. Weaker US economic releases or escalating trade tensions can support the bearish outlook, with preference for further Canadian Dollar gains against the US Dollar.

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Currencies GBP/USD

GBP/USD Inches Close to 1.3500 as Weak US Dollar and BoE Halt Bets Fuel Sterling

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  • June 2, 2025
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GBP/USD exchange rate starts the week strong, moving nearer to the important 1.3500 level as renewed US Dollar weakness keeps pressures on the pair. The weakening of the USD is fueled by increasing expectations of Federal Reserve rate reductions after soft PCE inflation readings and rising apprehensions regarding the US fiscal situation, especially in light of President Trump’s recent spending bill. In the meantime, the British Pound gets support from speculation that the Bank of England will maintain interest rates unchanged at its next June meeting. Yet, generalized caution in markets on account of rising geopolitical tensions and new US-China trade uncertainties might restrict the pair’s gains. The market now looks to future US economic news and Fed Chairman Powell’s statements for additional guidance. KEY LOOKOUTS • Market focus will be on near-term US economic releases, such as the ISM Manufacturing PMI, and remarks from Fed Chair Jerome Powell for additional indications about the direction of Fed interest rates. • Expectations of the BoE halting rate cuts at its June 18 gathering remain underpinning the GBP, with central bank guidance being a key variable in shaping GBP/USD sentiment. • Concerns about the US fiscal deficit, fueled by President Trump’s latest spending budget, and heightened US-China trade tensions can pressure the USD in the short term. • Rising geopolitical tensions—led by Russia, Ukraine, and the Middle East—can drive safe-haven demand for the USD and cap gains in GBP/USD even with underlying positive drivers. GBP/USD pair remains volatile to a variety of key factors that can influence its near-term direction. Market players will be keenly watching Fed Chair Jerome Powell’s forthcoming comments and the newest US macroeconomic reports, such as the ISM Manufacturing PMI, for cues on the Federal Reserve rate outlook. On the British side, hopes that the Bank of England will leave interest rates unchanged at its June 18 meeting remain behind the support for the Pound. But chronic worries over the US fiscal deficit, fueled by President Trump’s recent spending bill, and escalating tensions in US-China trade relations could further pressure the US Dollar to the downside. Meanwhile, wider risk-off sentiment sourced from the geopolitical tensions in Eastern Europe and the Middle East might provide some support to the Greenback, potentially putting a lid on the upside for GBP/USD. The GBP/USD currency pair is supported by hopes of a BoE rate standstill and continued USD weakness fueled by weak US data and fiscal issues. Nevertheless, geopolitical tensions and a conservative global risk tone could cap any further appreciation. Traders are now looking to essential US data and Fed commentary for new direction. •  GBP/USD trades around 1.3500, gaining positive momentum in the face of new USD weakness. •  Expectations for Fed rate cut increase after weak PCE inflation data in the US. •  US fiscal worries deepen following President Trump’s spending bill, putting pressure on the Dollar. •   BoE to keep rates steady in its June 18 meeting, favoring GBP strength. •  Geopolitical tensions in Eastern Europe and the Middle East weigh on global risk appetite. •   US-China trade uncertainty returns after Trump’s remarks, contributing to USD pressure. •   Upcoming US data and Powell’s address are in the spotlight for short-term direction for markets. GBP/USD pair has begun the week on a firm footing, helped by more general weakness in the US Dollar and enhanced confidence in the British Pound. A milder US inflation reading, as expressed through the most recent PCE Price Index, has further fueled bets that the Federal Reserve will choose additional policy loosening in the months ahead. This mood, together with increasing unease regarding the US fiscal situation in the wake of passage of a new government appropriation bill, has further contributed to the downward pressure on the Dollar. In the meantime, the British Pound holds steady, supported by hopes the Bank of England will be less willing to make further cuts in future interest rates, with no near-term moves anticipated at its next policy session. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView All the while, global market sentiment is being influenced by heightened geopolitical tensions and uncertainty regarding US-China trade relations. Recent comments from President Trump, in which he hinted that China might not completely live up to the terms of their trade deal, have also added to investor wariness. Also, all the recent conflicts in places like Eastern Europe and the Middle East still bear down on overall market sentiment. Therefore, investors are remaining close to upcoming US economic data and Federal Reserve speeches by officials, especially Chair Jerome Powell, for any signals that might impact policy expectations and currency market trends. TECHNICAL ANALYSIS GBP/USD is demonstrating signs of bullish momentum as it slowly inches towards the important psychological resistance around the 1.3500 level. Sustained break above this point may pave the way for further appreciation, with the next resistance at 1.3570–1.3600. On the downside, near-term support is at 1.3420, followed by firmer support at 1.3370, where the buyers may get back in. The overall framework is positive, but a decisive breakout above 1.3500 is required to ensure further uptrend. FORECAST GBP/USD pair holds scope for additional upside if prevailing momentum is sustained and the pair is able to achieve a clear breakout above the 1.3500 psychological mark. A change in market sentiment, aided by dovish communications from the Federal Reserve or improved UK economic indicators, could propel the pair to the next level of resistance around 1.3570–1.3600. Moreover, if the Bank of England is reticent about rate cuts while the Fed tends to ease, the policy differences might further favor bullish action in the pair. Conversely, any indication of strength in US economic statistics or even a more aggressive stance at the Fed can revive demand for the US Dollar at the expense of GBP/USD. A failure to hold above the 1.3500 level could trigger a short-term pullback, with initial support at 1.3420, and a further correction feasible towards 1.3370 if bearish momentum takes over. In addition, rising geopolitical tension or

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Currencies EUR/USD

EUR/USD Price Outlook: Testing Key Support Levels Amid Bullish Momentum

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  • May 7, 2025
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EUR/USD currency pair is now testing key support levels near 1.1320, with short-term bullish momentum boosted by the nine-day Exponential Moving Average (EMA) and the 14-day Relative Strength Index (RSI) staying above the 50 level. Unless recent retracements reverse the trend, the pair is still biased higher in an ascending channel pattern and could return to the April 21 high of 1.1573, which was its strongest level since November 2021. However, a breakdown below key support areas could reorient the trend into bearish grounds with additional risks for further losses extending towards the 50-day EMA at 1.1057 and a possible six-week low at 1.0360. KEY LOOKOUTS •  EUR/USD is probing important support at the vicinity of the nine-day EMA at 1.1320. A penetration below this might change the bias to a more bearish bias, paving the way for more downside. •  The 14-day RSI is still above the 50 level, supporting the ongoing bullish bias. Monitor any noteworthy changes in RSI behavior as an indication of possible trend reversals. • The duo can test the April 21 high of 1.1573, its highest since November 2021. Breaking above this level successfully may trigger more bullish action, with the next resistance around 1.1730. •  If the 1.1320 support gives way, the EUR/USD may extend its fall, with significant downside targets at the 50-day EMA (1.1057) and the six-week low of 1.0360. Watch out for these levels to spot possible trend reversals. EUR/USD pair stands at a pivotal resistance, testing significant support around 1.1320, which is bolstered by the nine-day Exponential Moving Average (EMA). As long as the 14-day RSI stays above 50, indicating continued bullish pressure, a fall below this support would change the outlook to the downside, with possible targets at the 50-day EMA of 1.1057 and the six-week low of 1.0360. To the upside, the pair is targeting the April 21 high of 1.1573, a level not reached since November 2021, with additional resistance around 1.1730. Since the pair is oscillating within an upward channel, investors should monitor any changes in these major levels to determine the direction to expect next. EUR/USD is probing important support at 1.1320, and bullish momentum is shown by the RSI being above 50. If broken, this could see a decline to 1.1057, or the upside move to the April 21 high of 1.1573. Traders should be keenly aware of these levels for possible trend reversals. • EUR/USD is probing major support at the nine-day EMA at 1.1320, with a possible bearish reversal if this level is penetrated. • The 14-day RSI continues to stay above 50, reflecting positive momentum and supporting the short-term bullish bias. • The April 21 high at 1.1573 is a pivotal resistance level, possibly indicating further appreciation if penetrated. • EUR/USD is in an upward channel, indicating sustained bullishness unless there is a breakdown below support. • A breakdown below 1.1320 may find the pair challenging the 50-day EMA of 1.1057, a key level for medium-term trends. • A further drop may take the pair to the six-week low of 1.0360, which was last hit on February 28. • Traders need to watch closely key support and resistance levels to measure possible trend reversals or continuation. EUR/USD pair is now at a pivotal point as it consolidates around key levels, with a dominant bullish sentiment affecting its short-term direction. Such momentum is driven by optimistic market expectations, and even with recent retracements, the general trend appears to continue upward. With the duo moving through this stage, its ability to continue along the current path is being watched closely by traders and analysts, particularly as it hangs around key levels that may determine its next move. EUR/USD DAILY PRICE CHART CHART SOURCE: TradingView In the overall picture, the EUR/USD is set in a manner that indicates possible future prospects for additional increases, particularly with historical highs looming. Market sentiment is positive, bolstered by the pair’s overall upward trend and the expectation of positive market events. Investors will probably maintain a close watch over global economic reports and political events, which might affect the direction of the EUR/USD and strengthen or undermine its current trajectory. TECHNICAL ANALYSIS EUR/USD pair is testing key support near the nine-day Exponential Moving Average (EMA) at 1.1320, with the 14-day Relative Strength Index (RSI) still above 50, showing ongoing bullish momentum. The pair is in an ascending channel, reflecting the likelihood of continuing higher if supported above this level. The major resistance is at April 21 high of 1.1573, with additional upside to 1.1730. A breakdown below the present support levels may result in a change of sentiment, which may propel the pair towards the 50-day EMA at 1.1057, with additional downside risks stretching to the six-week low of 1.0360. FORECAST EUR/USD pair can potentially maintain its bullish trend, particularly if it remains above the critical support at 1.1320. If the pair is able to hold within its uptrending channel, it may revisit the April 21 high of 1.1573, the highest level since November 2021. A successful breakout above this would propel the uptrend further, with the next resistance target at 1.1730. Based on current market sentiment and technical indicators, there is hope for the pair to test the higher levels in the near future. Conversely, a decline below the key support area of about 1.1320 would represent a change in market sentiment, paving the way for further bearish action. Below this level, the pair might test the 50-day EMA at 1.1057, which is likely to provide strong support. A further drop would be towards the six-week low of 1.0360, last recorded in February. This would signal a faltering of the medium-term bullish trend, and the traders would keep a close eye on these lower levels for stabilization or additional pressure to the downside.

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Currencies EUR/USD

EUR/USD Under Pressure Amid US Dollar Rebound and Poor Eurozone Economic Figures

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  • April 23, 2025
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EUR/USD recently saw a pullback, temporarily falling below 1.1400 as the US Dollar rallied, driven by President Trump’s remarks on the independence of the Federal Reserve and his hopes for hitting a trade agreement with China. This followed a period of volatility on concerns over tariffs and the Fed’s interest rate plans. At the same time, the Euro came under pressure from soft Eurozone economic indicators, with the April PMI showing weak growth, especially in the services sector. With market players expecting possible ECB rate reductions, the short-term direction of the EUR/USD pair is unclear, as the US Dollar is already displaying signs of regaining its safe-haven appeal. KEY LOOKOUTS • The US Dollar has picked up steam after President Trump’s assurances regarding the independence of the Fed and his positive sentiments on US-China trade negotiations. Market players will be looking for updates in these fronts to assess the sustainability of the Dollar’s recovery. • Poor PMI readings in the Eurozone, specifically a decline in the services sector, indicate the struggles of the region’s economic growth. Investors will watch closely for future economic statistics to determine if this trend persists. • Increasing speculation that the European Central Bank (ECB) might make further interest rate cuts in June could negatively impact the Euro. Words from ECB officials, especially President Christine Lagarde, will be crucial to determining the central bank’s future action. • The EUR/USD pair is resisted at the important 1.1600 level, and 1.1276 is a pivotal support area. Traders need to monitor these levels for possible price action that might determine the next direction for the pair. EUR/USD has come under downward pressure lately, falling below 1.1400 as the US Dollar gained strength after President Trump’s words of comfort to the market regarding the Federal Reserve’s independence and his optimistic view on US-China trade negotiations. The Euro has fared poorly, burdened by soft Eurozone PMI readings, especially a decline in the services sector, which indicated slowing economic growth in the region. Also, rising hopes that the European Central Bank (ECB) will reduce interest rates further in June have contributed to the weakness of the Euro. While the market weighs these factors, EUR/USD is in a precarious balance, with important resistance at 1.1600 and support at 1.1276. EUR/USD recently broke below 1.1400, as the US Dollar appreciated following President Trump’s remarks about the Fed and US-China trade negotiations. However, soft Eurozone PMI data and anticipations of future ECB rate reductions are weakening the Euro, making the currency pair remain in cautious territory. • EUR/USD fell as the US Dollar rallied, driven by President Trump’s assurance regarding the Federal Reserve’s autonomy and positive trade discussion news with China. • The April PMI data from the Eurozone showed poor economic growth, with a decline in the service sector, putting pressure on the Euro. •  Trump showed optimism that the US and China would come to a trade agreement, mitigating some of the tariff-related uncertainty that had previously weighed on the market. • Trump also signaled frustration with the Fed’s decision not to lower interest rates, injecting volatility into the market’s view of US monetary policy. • Heightened expectations that the European Central Bank will cut interest rates again in June are putting pressure on the Euro. • EUR/USD is resisted at the 1.1600 level, with support at the July 2023 high of 1.1276. • Investors are hesitant as they wait for additional economic data from both the US and Eurozone to determine the trend of the EUR/USD pair. EUR/USD pair has recently seen a change in momentum, mainly as a result of events in the US economy and trade negotiations. President Trump’s words of support for the Federal Reserve’s independence and optimism regarding a possible trade agreement with China have given the US Dollar a boost. His assurances have eased market fears over the Fed’s policies, specifically concerns that he would attempt to oust Chairman Jerome Powell. This has given the US Dollar an added attractiveness as investors regained confidence in its stability. EUR/USD DAILY PRICE CHART CHART SOURCE: TradingView Conversely, the Eurozone is suffering from economic issues, with low PMI numbers indicating that the region’s growth is decelerating, especially in the services sector. The possibility of additional rate cuts by the European Central Bank has also contributed to doubts regarding the strength of the Euro. With low inflation expectations and economic activity in the doldrums, the Euro is facing pressure as investors expect further policy measures by the ECB. These factors have placed the EUR/USD pair in a precarious balance, with the US Dollar picking up steam and the Euro struggling to keep its footing amidst regional economic strife. TECHNICAL ANALYSIS EUR/USD has run into resistance at the 1.1600 level, which has halted its recent upward movement. The pair dipped briefly below 1.1400, signaling a correction after touching a three-year high of 1.1575. The 14-week Relative Strength Index (RSI) has spiked above the 70.00 mark, indicating strong bullish pressure but also hinting at potential correction in the near future. Support for the pair is at the July 2023 high of 1.1276, and a strong dip below this point may indicate further downward potential. While the pair remains in this vicinity, the key levels will be eyed by traders for probable breakout or reversal trades. FORECAST If the US Dollar continues to exhibit strength, especially in view of additional favorable news in trade talks or optimism regarding the policies of the Fed, EUR/USD may remain under pressure. But if the Eurozone can stabilize its economic situation and the ECB does not make additional drastic rate cuts, there is some hope for the pair to turn around. A breach above the 1.1600 resistance would be an indication of a change in direction, with further increases to higher levels possible. A boost in stronger economic numbers or fiscal stimulus plans in the Eurozone could also support the Euro to some extent, aiding its recovery. EUR/USD stands at risk of further declines in case the

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