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

U.S. Dollar: Weekly Preview

The United States brings many important economic events. Additionally, as I have mentioned several times, the ongoing war in the Middle East could greatly influence market sentiment. As a result

Chin Zhao 00:12 2025-06-23 UTC+2

British Pound: Weekly Preview

The dynamics of the British pound will also not be driven by the pound itself or domestic UK news. The reasons are the same: the U.S. involvement in the Middle

Chin Zhao 00:12 2025-06-23 UTC+2

Euro: Preview of the Week

Few genuinely believe that economic news will overshadow other developments in the coming week. These "other developments" are of global significance. Over the weekend, the United States launched a strike

Chin Zhao 00:12 2025-06-23 UTC+2

AUD/JPY. Analysis and Forecast

The AUD/JPY pair is regaining positive momentum after a modest pullback the previous day. However, spot prices remain confined within a multi-day range due to mixed fundamental signals, trading near

Irina Yanina 14:39 2025-06-20 UTC+2

USD/CHF: The Pair Struggles to Gain Momentum Amid Conflicting Forces

At present, USD/CHF shows no clear intraday direction and fluctuates within a narrow range just above the 0.8155 level, reflecting market uncertainty during the European session. The Swiss franc

Irina Yanina 14:36 2025-06-20 UTC+2

The Euro Will Retain Its Strength and Investor Interest

During her speech, IMF Managing Director Kristalina Georgieva stated that she sees the potential for the euro to play a broader role globally.Her remarks came amid growing geopolitical instability

Jakub Novak 11:25 2025-06-20 UTC+2

Euro Slightly Rises After Lagarde's Speech

The euro saw a modest recovery after European Central Bank President Christine Lagarde stated that expanding trade within the region could help offset losses resulting from global fragmentation. Her optimistic

Jakub Novak 11:10 2025-06-20 UTC+2

Donald Trump – A Mastermind of Geopolitical Uncertainty (A Potential Correction in Oil and Gold Prices)

Six months into Donald Trump's presidency, it seems he has already thoroughly exhausted the world with his "brilliant" initiatives, groundbreaking actions aimed at making America great again, and his vivid

Pati Gani 09:49 2025-06-20 UTC+2

The Market Tries to Extinguish the Fire

Markets are digesting Donald Trump's announcement that a decision on U.S. strikes against Iran will be made within two weeks. The White House could have acted at any moment

Marek Petkovich 09:01 2025-06-20 UTC+2

What to Pay Attention to on June 20? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic reports scheduled for Friday. The only report of the day will be the UK retail sales report. No economic data will be released today

Paolo Greco 07:45 2025-06-20 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.