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

Good News Will Support Stock Markets and Token Demand (Potential Upside for Bitcoin and #NDX)

The market has ignored extremely weak employment data from ADP, focusing its attention on other factors. The ADP report released on Wednesday showed a significant slowdown in the U.S. private

Pati Gani 10:40 2025-07-03 UTC+2

Trump Targets China Through Vietnam

Yesterday, it was revealed that President Donald Trump had reached a trade agreement with Vietnam. This came after several weeks of intense diplomatic negotiations between the two countries and just

Jakub Novak 10:00 2025-07-03 UTC+2

A Wake-Up Call for the U.S. Economy

Yesterday's U.S. employment data served as a wake-up call for the American economy. According to the report, the number of employed persons declined in June for the first time

Jakub Novak 09:55 2025-07-03 UTC+2

The Market Bets on Profits

The market remains confident in a positive future. It hears only what it wants to hear. Negative news is ignored, allowing the S&P 500 to set new records. It doesn't

Marek Petkovich 09:35 2025-07-03 UTC+2

What to Pay Attention to on July 3? A Breakdown of Fundamental Events for Beginners

A significant number of macroeconomic reports are scheduled for release on Thursday, including some key reports. As a reminder, U.S. labor market and unemployment data are typically released on Friday

Paolo Greco 06:53 2025-07-03 UTC+2

GBP/USD Overview – July 3: Jerome Powell Finally Responded to Trump

The GBP/USD currency pair plummeted on Wednesday like a stone. However, every drop in the pair eventually gives way to a much stronger rise. Therefore, at this point, there's

Paolo Greco 03:45 2025-07-03 UTC+2

EUR/USD Overview – July 3: One Big Trump Law Passed, Dollar at 4-Year Lows

The EUR/USD currency pair traded relatively calmly on Wednesday, although the word "calm" may not accurately describe the daily decline of the dollar. The most accurate picture of what's happening

Paolo Greco 03:45 2025-07-03 UTC+2

Transition from Aggressive to Cautious Position by the ECB

The annual economic forum is currently taking place in the Portuguese town of Sintra, which explains the daily speeches by central bank heads. Most of the information being shared

Chin Zhao 00:42 2025-07-03 UTC+2

USD/JPY. Yen: Interrupted Flight

The USD/JPY pair dropped by 200 points over two days and on Tuesday hit a nearly four-week low, testing the support level at 142.70 (the middle line of the Bollinger

Irina Manzenko 00:38 2025-07-03 UTC+2

The Dollar Has Found Its Achilles' Heel

Be careful what you wish for. Euro supporters believe that EUR/USD will reach at least 1.25 by 2026. However, one must understand that while the eurozone may remain a unified

Marek Petkovich 00:38 2025-07-03 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.