empty
02.12.2024 02:50 PM
USD/CAD: Analysis and Forecast

This image is no longer relevant

Today, the USD/CAD pair is gaining positive momentum, breaking a three-day losing streak and halting a recent corrective pullback from its highest level since April 2020, near 1.4179–1.4180, reached last Tuesday.

The tariffs proposed by U.S. President Donald Trump against the three largest trading partners of the United States — Canada, Mexico, and China — continue to pressure the Canadian dollar. This, coupled with renewed demand for the U.S. dollar, serves as another supportive factor for the currency pair.

In a weekend post, Trump threatened a 100% tariff on BRICS countries — Brazil, Russia, India, China, and South Africa — if they replace the U.S. dollar with another currency for international transactions. This statement has fueled speculation that his tariff policies could resurface inflationary pressures, prompting the Federal Reserve to halt rate cuts or even consider rate hikes. These prospects have triggered another surge in U.S. Treasury yields, further bolstering demand for the U.S. dollar.

This image is no longer relevant

Additionally, cautious market sentiment continues to benefit the greenback, supporting USD/CAD demand. Even a slight rise in oil prices failed to offset the losses of the commodity-tied Canadian dollar. This suggests that, in the short term, the path of least resistance for the pair remains upward.

This image is no longer relevant

Traders may refrain from aggressive directional positions. This is due to crucial U.S. macroeconomic data scheduled for the start of the new month. This week's U.S. session begins with significant economic reports, including the ISM Manufacturing Index, while the primary focus will remain on the NFP non-farm payrolls report, set for release on Friday.

These employment figures will provide crucial insights into the Fed's rate policy and influence the U.S. dollar, driving USD/CAD momentum.

Bullish oscillators on the daily chart confirm a short-term positive forecast, supporting prospects for additional gains. Subsequent buying above 1.4045 could enable spot prices to reclaim the 1.4100 level. The momentum may lift USD/CAD toward its multi-month high near 1.4179–1.4180, eventually reaching the 1.4200 round level. Beyond this, the pair could aim for its 2020 high.

This image is no longer relevant

The 1.4000 psychological level now serves as the first line of support against further declines, ahead of Friday's multi-day low near 1.3980. Failure to hold these levels could trigger technical selling, leading to a deeper correction from the multi-year peak.

Below this, USD/CAD could drop toward support at 1.3955, then 1.3925, or last week's swing low. Further losses may test the 1.3900 round level, and a breach could push spot prices toward the November low of 1.3820–1.3815.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

Today, following the release of data showing a February slowdown in the national Consumer Price Index (CPI), the Japanese yen continues to trade with a negative tone, creating uncertainty

Irina Yanina 11:07 2025-03-21 UTC+2

US stock market getting ready for zero hour

The Federal Reserve has done all it can to calm the markets, but in 2025, the spotlight has shifted away from the central bank. The S&P 500 has brushed

Marek Petkovich 09:20 2025-03-21 UTC+2

What to Pay Attention to on March 21? A Breakdown of Fundamental Events for Beginners

There are no scheduled macroeconomic events for Friday. The euro and the pound have finally declined against the U.S. dollar. The Federal Reserve has done its part to calm

Paolo Greco 06:06 2025-03-21 UTC+2

GBP/USD Pair Overview – March 21: The Bank of England Had No Impact on the Current Situation

The GBP/USD currency pair traded very calmly on Thursday, as on Wednesday evening. As the chart below clearly shows, volatility has recently dropped to noticeably low levels. What

Paolo Greco 04:16 2025-03-21 UTC+2

EUR/USD Pair Overview – March 21: Markets Panicked in Vain, but That Doesn't Help the Dollar

The EUR/USD currency pair began showing a semblance of a downward correction between Wednesday and Thursday. The price has consolidated below the moving average on the 4-hour chart, but it's

Paolo Greco 04:16 2025-03-21 UTC+2

The Outlook for the Japanese Yen Remains Confidently Bullish

The Bank of Japan (BoJ) kept interest rates unchanged on Wednesday, and the market reacted neutrally, as this outcome was widely expected. BoJ Governor Kazuo Ueda stated that the risk

Kuvat Raharjo 23:46 2025-03-20 UTC+2

The Dollar Takes Back Its Own

Markets shoot first and ask questions later. Upon hearing Jerome Powell's assurance that the Federal Reserve had everything under control and that there would be no recession, U.S. stock indices

Marek Petkovich 23:45 2025-03-20 UTC+2

XAU/USD. Analysis and Forecast

Gold is experiencing a slight decline after reaching a new all-time high, remaining in a defensive stance. Currently, bullish traders are exercising caution, as indicated by overbought conditions

Irina Yanina 10:29 2025-03-20 UTC+2

Fed's message music to bulls' ears

The Fed is not throwing a lifeline to the S&P 500, but does it need one? Lifelines are for those drowning, while the market is merely spooked by a fleeting

Marek Petkovich 09:05 2025-03-20 UTC+2

Markets Are Stuck in a Vicious Circle with No Exit in Sight (Potential Decline for Bitcoin and Gold Prices)

The markets are currently experiencing significant shock due to a prevailing negative sentiment that looms over them like a heavy burden, with no resolution in sight. Given this situation

Pati Gani 08:23 2025-03-20 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.