empty
06.03.2025 06:53 PM
USD/CAD: Analysis and Forecast

This image is no longer relevant

The USD/CAD pair is rebounding from the 1.4300 level, which marks the weekly low, but its recovery may face significant hurdles.

The U.S. dollar index has dropped close to November lows, pressured by the tariffs imposed by Donald Trump and growing expectations that the Federal Reserve may cut interest rates multiple times in 2025. The latest Automatic Data Processing (ADP) report showed that private sector employment in the U.S. grew by just 77K in February, falling far short of the 140K forecast. This weak data has raised concerns over a potential economic slowdown despite continued expansion in the services sector.

Additionally, Trump's one-month delay in enforcing new tariff agreements with Mexico and Canada for U.S. auto manufacturers has reduced the immediate risk of a trade war, prompting investors to shift toward riskier assets.

At the same time, the Canadian dollar is gaining support from expectations that the Bank of Canada (BoC) will pause its rate-cut cycle at the upcoming policy meeting. Additionally, recovering oil prices are providing a boost to the Canadian economy.

However, traders may hold off on making major decisions until Friday's key employment reports from both the U.S. and Canada.

This image is no longer relevant

Today's economic calendar includes the weekly U.S. jobless claims report and the Ivey PMI data from both the U.S. and Canada. These releases could provide some volatility early in the North American session. Furthermore, speeches from key FOMC members may influence demand for the U.S. dollar, while oil price movements could also impact USD/CAD trading opportunities in the short term. Given the mixed fundamental backdrop, buyers should exercise caution.

Technical Analysis

From a technical perspective, 1.4300 has now become a key pivot level. A convincing breakdown below this support could trigger a further decline toward 1.4260, with the next downward target at the psychological level of 1.4200, which aligns with the 100-day Simple Moving Average (SMA). A break below this SMA could act as a bearish trigger, leading to deeper losses.

This image is no longer relevant

On the daily chart, oscillators have not yet turned negative but are losing bullish momentum, signaling the need for caution.

On the other hand, any recovery attempts will face strong resistance near the 1.4400 round level. A breakout above this mark could push the pair toward 1.4470, with a further rally potentially targeting 1.4500—a key psychological level and the monthly high reached on Tuesday.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Irina Yanina
Start trade
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

On Monday, the Japanese yen is struggling to capitalize on a modest correction amid a weaker US dollar. Sunday's elections to Japan's upper house of parliament put strong pressure

Irina Yanina 19:43 2025-07-21 UTC+2

XAU/USD. Analysis and Forecast

At the start of the European session on Monday, gold showed a positive tone, but the price continues to trade within a multi-week range. The US dollar, retreating from

Irina Yanina 19:36 2025-07-21 UTC+2

Bitcoin gathering strength for leap

FOMO — the fear of missing out — has been the main driver behind the BTC/USD rally. Regardless of how much is said about the US passing crypto-friendly legislation, capital

Marek Petkovich 13:27 2025-07-21 UTC+2

NZD/USD. Analysis and Forecast

Trade-related uncertainty continues to call for caution among traders with a bullish bias. At the start of the European session, the NZD/USD pair partially recovered its intraday losses. However

Irina Yanina 12:40 2025-07-21 UTC+2

Gold Resumes Its Uptrend

Gold rose at the opening of the Asian session on Monday as traders evaluated differing views among U.S. Federal Reserve officials on how President Donald Trump's tariff policy might affect

Jakub Novak 12:03 2025-07-21 UTC+2

No Consensus on Interest Rates Within the Federal Reserve

Judging by recent comments from several Federal Reserve officials, the committee has yet to reach a consensus on interest rate policy. While some members continue to stress the need

Jakub Novak 12:01 2025-07-21 UTC+2

The Euro May Get a Chance to Rise

Traders preparing for the upcoming European Central Bank meeting this Thursday, which will focus on setting interest rates, should also pay close attention to numerous economic reports this week

Jakub Novak 11:59 2025-07-21 UTC+2

Good news already priced in?

Not long ago, Donald Trump could send Wall Street into turmoil with a single social media post. Now, he is threatening to fire the Fed chair and remove the firewall

Marek Petkovich 09:13 2025-07-21 UTC+2

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

There are no macroeconomic reports scheduled for Monday. Therefore, weak market movements can be expected. Of course, Donald Trump could unexpectedly return to the spotlight at any moment with

Paolo Greco 04:01 2025-07-21 UTC+2

EUR/USD Weekly Preview: Tariff Saga, ECB Meeting, PMI and IFO Indices

The penultimate week of July lies ahead. We will learn the outcome of the next European Central Bank meeting as well as the July figures of key macroeconomic indicators. Additionally

Irina Manzenko 00:07 2025-07-21 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.