Forex Trading Tools and Services

Currencies

USD/CAD Forecast: Bearish Momentum Continues Below 1.3750 on Dovish Fed and Geopolitical Quietness

  • BY
  • June 24, 2025
  • 0 Comments

USD/CAD currency pair remains in a bearish tendency, trading close to 1.3720 during early European trading on Tuesday. The downward trend is fueled by a weaker US Dollar, under pressure due to a truce between Iran and Israel as well as dovish utterances from the US Federal Reserve, with Fed Governor Michelle Bowman suggesting that the Federal Reserve might cut interest rates in July. Technically, the pair is still below the 100-day EMA and bears bearish momentum with the RSI in the low zone. Critical support is at 1.3635, while resistance is at 1.3820, maintaining the bearish outlook in place unless a decisive breakout above key resistance levels. KEY LOOKOUTS • A break below this level may trigger further decline to 1.3575 and 1.3540. • The pair has to break this level in order to test higher resistance at 1.3862 and 1.3935. • Being below the 100-day EMA and the RSI below 50 implies persistent bearish pressure. • Any additional indications of Fed rate cuts would bear down on the US Dollar and add to CAD strength. The USD/CAD currency pair is still under bearish pressure as it hovers close to 1.3720 in early European trade, pressured by dovish comments from the US Federal Reserve and de-escalation of geopolitical tensions in the Middle East. A short-term ceasefire between Iran and Israel has curbed safe-haven demand for the US Dollar, while Fed Governor Michelle Bowman’s mention of a possible July rate cut has contributed to weakness in USD. Technically, the pair remains below the 100-day EMA and the RSI is below the neutral 50 mark, adding credence to a bearish bias. Traders are watching the pivotal support level of 1.3635, with more significant downside risks on a break below this zone. USD/CAD is trading around 1.3720 in a bearish fashion with a weaker US Dollar and dovish Fed cues. The pair remains below the 100-day EMA, and the support is at 1.3635 while the resistance is at 1.3820. Breaking below support may lead to further losses down to 1.3575. • USD/CAD is trading around 1.3720 in early European trading, and it continues to be in a bearish mood. •  The pair remains below the 100-day Exponential Moving Average, indicating bearish pressure. • RSI lingers below the 50 level, supporting weak bullish momentum. • Fed Governor Michelle Bowman suggested a potential July rate cut, pressuring the US Dollar. • Geopolitical tensions subside as Iran-Israel ceasefire comes into effect, cutting safe-haven demand. • Support is at 1.3635, then 1.3575 and 1.3540 on sustained losses. • The resistance is at 1.3820; breaking above it could pave the way to 1.3862 and 1.3935. The USD/CAD pair is under pressure following the changing geopolitical and monetary policy trends. An agreement for a ceasefire between Israel and Iran has mitigated market tensions, leading to moving away from safe-haven currencies such as the US Dollar. This development has benefited commodity currencies such as the Canadian Dollar, particularly as global energy markets react to lower supply disruption risk. The diplomatic progress has introduced some stability into markets, which has enabled investors to begin to concentrate once again on economic fundamentals and central bank cues. USD/CAD DAILY PRICE CHART SOURCE: TradingView Compounding the US Dollar’s weakness are dovish indications emanating from the Federal Reserve. Fed Governor Michelle Bowman’s rhetoric hinting at a willingness to cut rates in July has fueled hopes of a more accommodative policy. The change of tone is weakening demand for the Greenback and adding to the Canadian Dollar’s strength. As sentiment adjusts to the prospect of lower US interest rates and diminished geopolitical risk, USD/CAD can continue to be pressured unless later economic data turns the outlook drastically. TECHNICAL ANALYSIS USD/CAD has a bearish inclination as it moves below the 100-day Exponential Moving Average (EMA), which is one of the most important medium-term trend direction indicators. The 14-day Relative Strength Index (RSI) is also below the middle of the neutral 50 level at 47.75, indicating diminishing bullish momentum. The pair is immediately supported at 1.3635, the June 18 low, then at 1.3575 just below the lower Bollinger Band and 1.3540, the June 16 low. On the other side, resistance is at 1.3820, consistent with the upper Bollinger Band. An extended advance above this level may set the stage for a challenge of 1.3862 and possibly the 100-day EMA at 1.3935. FORECAST The USD/CAD currency pair is expected to stay pressured if it remains below the 100-day EMA and is unable to regain buying momentum. Breakout below the near-term support of 1.3635 may initiate further losses to 1.3575, which serves as the lower edge of the Bollinger Band. Should bearish sentiment continue, the next substantial support is at 1.3540, the low made on June 16. Further US Dollar weakness on account of dovish Fed rhetoric and calm geopolitical tensions could speed up the breakdown move. Conversely, a rebound above the 1.3820 resistance level would alter the mood toward a short-term bullish reversal. If the duo is able to hold above this area, it can draw buying interest and move towards 1.3862, the May 29 high. Another break above it could set the stage towards the pivotal 100-day EMA level of 1.3935. Upside risk, though, remains limited unless backed by a more robust US Dollar or a change in risk appetite.

Read More
Currencies

USD/CAD Outlook: Loonie Set for Further Downside as Market Awaits Fed Policy and Trade Negotiations

  • BY
  • June 17, 2025
  • 0 Comments

USD/CAD remains pinned around 1.3575, indicating consolidation in anticipation of the much-expected Federal Reserve policy announcement. The market is widely expecting the Fed to leave interest rates at 4.25%-4.50% levels, thereby preventing any unusual market volatility. As for positive news on a prospective US-Canada trade agreement, the Canadian Dollar remains underperforming, with USD/CAD near its eight-month low. Bearish technical signals, such as falling EMAs and weak RSI, suggest possible downside towards the 1.3400 level, unless the pair can pull off a conclusive rebound above 1.3820. KEY LOOKOUTS • Markets watch out for the Fed interest rate statement, with a forecasted hold at 4.25%-4.50%, which can be relevant to USD volatility. • Hope of a trade deal between Trump and Carney can serve to back CAD if talks proceed as scheduled in the next 30 days. • A dip below 1.3540 might initiate further downfall towards 1.3500 and 1.3420, perpetuating the bearish trend. • 14-day RSI is still in bearish range (20-40), and all the major EMAs are in declining modes, indicating continuous selling pressure. USD/CAD currency pair stays bearish, trading at around 1.3575 as investors take a risk-off approach in the run-up to the Federal Reserve’s monetary policy statement. As much as a rate decision is expected to be held back, any indication of impending policy changes may inject some volatility into the US Dollar. Even as there is a favorable environment for the Canadian Dollar on account of a predicted trade agreement between Canada and the US, the Loonie remains underperforming. Technically, the bearish setup is still intact, and momentum gauges and EMAs suggest lower. A convincing fall below 1.3540 could set the stage for further losses towards 1.3500 and then 1.3420. USD/CAD fluctuates around 1.3575 as markets wait for the Fed rate decision. Even with trade deal euphoria, the Canadian Dollar lags. A fall below 1.3540 could lead to further losses toward 1.3400. • USD/CAD is trading around 1.3575, maintaining Monday’s range. • The Fed should keep interest rates at 4.25%-4.50%. • Investors are looking for policy cues from the Federal Reserve. • Canadian PM Carney and US President Trump target a trade agreement in 30 days. • Even with trade optimism, CAD trails other major currencies. • Technicals reveal a bearish pattern with all EMAs trending lower. • A decline below 1.3540 may send the pair to 1.3500 and 1.3420 support levels. The USD/CAD currency pair continues to be range-bound with market players looking ahead to the Federal Reserve interest rate decision later today. With general expectations of the Fed leaving its rate policy unchanged, investors are more interested in any forward guidance that would give clarity to future rate direction. This cautionary mood has seen the US Dollar firm up against its peers, including the Canadian Dollar, in advance of the mid-week policy declaration. USD/CAD DAILY PRICE CHART SOURCE: TradingView On the geopolitical side, events between Canada and the United States have captured the spotlight, including Canadian Prime Minister Mark Carney and US President Donald Trump’s commitment to seal a trade agreement within 30 days. Such an action would have significant consequences for North American trade patterns and investor sentiment. Even amid this seemingly rosy context for the Canadian economy, market responses have been muted as investors remain in wait for tangible advances on the trade horizon. TECHNICAL ANALYSIS USD/CAD remains bearish as the pair keeps trading below fundamental moving averages, with all short-to-long-term EMAs trending south—reflecting consistent selling pressure. The Relative Strength Index (RSI) continues to be weak, fluctuating between 20 and 40, reflecting that bearish momentum still prevails. A break below Monday’s low of 1.3540 would probably speed the downside movement, possibly pulling the pair towards the next important support levels of 1.3500 and 1.3420. Any rebound, though, above 1.3820 might change the near-term bias to bullish. FORECAST If USD/CAD penetrates the significant support at 1.3540, it might pave the way for more losses. The next strong psychological figure to monitor is 1.3500, with the September 25 low at 1.3420 coming next. Sustained bearish pressure, coupled with diminishing expectation of positive economic surprises in the US, may continue to fuel downward pressure in the near term. Conversely, a convincing bounce through the May 29 high of 1.3820 would confirm a reversal in sentiment and potentially turn the bearish structure of the pair around. This may set the stage for a test of the May 21 high at 1.3920 and ultimately the May 15 high at 1.4000, particularly if US economic conditions firm up or Fed commentary unexpectedly becomes hawkish.

Read More
Currencies

USD/CAD Reaches Weekly Highs on USD Strength, But Increases Might Be Limited in the Face of Important Economic Releases and FOMC Minutes

  • BY
  • May 28, 2025
  • 0 Comments

The USD/CAD currency pair has continued to recover for a third straight day, rising to a new weekly high at the 1.3840 level due to slight US Dollar appreciation after robust US economic reports. Yet, still lingering over the US fiscal horizon and increasing hopes of Fed rate reductions in 2025 might cap further gains. On top of this, traders are being cautious before the FOMC meeting minutes and major economic announcements, such as US GDP, PCE statistics, and Canada’s monthly GDP. Though higher crude oil prices and firmer Canadian inflation statistics might underpin the Loonie, a conclusive trend might only be seen with continued follow-through buying. KEY LOOKOUTS •  Traders will be keeping a close eye on the minutes for insight into the Fed’s interest rate outlook, which may determine USD sentiment and near-term price action. •  The coming Prelim Q1 GDP and PCE Price Index releases will be pivotal in influencing expectations for future Fed policy action and shaping USD demand. •  Canada’s monthly GDP and variations in crude oil—Canada’s major export—will be crucial in deciding CAD strength. •  Continuous worries over the US fiscal health can keep the USD under pressure, keeping gains in the USD/CAD pair in check even with positive information. USD/CAD pair trades at weekly highs, market players are closely eyeing a number of crucial factors that can decide its next direction. The release of the FOMC meeting minutes is eagerly awaited, as investors want to know the Fed’s rate-cut path. Along with that, the next US economic data releases—specifically the preliminary Q1 GDP and the PCE Price Index—will be crucial in deciding the momentum of the USD. On the Canadian front, more-than-anticipated core inflation and the next monthly print of GDP, along with crude oil price fluctuations, may provide the Loonie with support. Also, ongoing worries regarding the US fiscal horizon could still limit the greenback’s appreciation, contributing to the pair’s short-term ambiguity. Traders are looking to the FOMC meeting minutes and leading US data such as Q1 GDP and PCE for hints at the Fed’s rate trajectory. On the Canadian front, firmer inflation and coming GDP prints, as well as oil price action, may underpin the Loonie. US fiscal issues may also cap additional USD gain. • USD/CAD is trading around 1.3840, a third consecutive day of rising gains and a new weekly high. • Positive US economic data has propped up the USD, alleviating recession concerns and boosting the DXY. • FOMC meeting minutes are expected for some clarity on the Fed’s rate-cutting outlook in 2025. • US fiscal issues and dovish Fed expectations could cap further gains for the USD. • Prelim US Q1 GDP and PCE Index figures may have a strong bearing on the direction of the USD this week. • Warmer Canadian core inflation has taken away some possibility of a June BoC rate cut, supporting CAD strength. • Crude oil price action and Canadian monthly GDP will be major drivers for the Loonie. The USD/CAD pair is still in the spotlight this week as a number of significant economic events on both sides of the border continue to happen. The US Dollar is finding support from some recent encouraging economic data, which has helped to alleviate some recession fears and lift sentiment in the markets. While investor attention is firmly focused on the upcoming release of FOMC meeting minutes, which should give more definitive direction on future interest rate policy by the Federal Reserve. Simultaneously, persistent worries about the US fiscal picture are causing volatility and may affect the overall demand for the USD in the near future. USD/CAD DAILY PRICE CHART CHART SOURCE: TradingView In Canada, better-than-anticipated core inflation readings have caused the market expectations for potential interest rate reductions by the Bank of Canada to change. This, along with higher crude oil prices, has supported the Canadian Dollar beneath. In the coming week, the release of Canada’s monthly GDP report will be under keen observation for additional evidence of economic strength. Along with the important US releases of Q1 GDP and the PCE Price Index, these are the elements most likely to determine the market mood towards the USD/CAD currency pair for the rest of the week. TECHNICAL ANALYSIS USD/CAD has continued its recovery from the recent low around the 1.3685 area, with the pair now sitting near the 1.3840 resistance area. This area represents a significant barrier, and a breakout above it can be a signal of bullish continuation in the short term. Still, momentum indicators such as the Relative Strength Index (RSI) are nearing overbought levels on the daily chart, which means buyers might get tired if the pair is unable to break higher convincingly. On the bearish side, near-term support is around the 1.3780 level, followed by the 1.3725-1.3700 area, which would serve as a cushion if the pair is subject to selling pressure. FORECAST If the bullish trend remains and USD/CAD decisively breaks above the 1.3840 resistance zone, then the pair may target the next levels on the upside at 1.3880 and possibly 1.3915. More robust US economic data and a hawkish interpretation of FOMC meeting minutes will fuel additional support for the USD to drive the pair further up. Moreover, any backtracking in crude oil prices or softer-than-anticipated Canadian GDP figures might soften the Canadian Dollar, providing more space for further upsides. Alternatively, a failure to sustain above the 1.3840 threshold might spark a short-term correction, with near-term support around the 1.3780 region. A more severe pullback can also challenge the 1.3725–1.3700 support level, particularly if US data is disappointing or if the FOMC minutes suggest a more dovish policy. Some strong Canadian economic data or a continuation of the oil price increase can also reinforce the Loonie and push the pair down towards a revisit of the recent low around 1.3685.

Read More