empty
06.12.2024 01:53 PM
USD/CAD: Analysis and Forecast

This image is no longer relevant

Today, the USD/CAD pair is regaining positive momentum as lower crude oil prices weaken the Canadian dollar.

Crude oil prices remain under pressure for the third consecutive day due to concerns over a potential supply glut and slowing global demand, particularly in China, the world's largest importer.

This image is no longer relevant

OPEC+ (the Organization of Petroleum Exporting Countries and its allies) has delayed planned production increases until April 2025. Additionally, the full phase-out of production cuts has been extended until the end of 2026. This weakens the commodity-linked Canadian dollar, providing gradual support for the USD/CAD pair.

At the same time, geopolitical tensions, U.S. economic resilience, and hopes for expansionary policies under U.S. President-elect Donald Trump may support crude oil prices.

This image is no longer relevant

Meanwhile, the U.S. dollar remains stagnant near multi-week lows. Dollar bulls are awaiting the U.S. nonfarm payrolls (NFP) report, which is scheduled for release during the North American session. This data will shape expectations for Federal Reserve interest rate cuts, influencing the short-term price action of the U.S. dollar and providing fresh directional momentum for USD/CAD.

Additionally, speeches from prominent FOMC members could induce market volatility, creating trading opportunities in USD/CAD. However, these speeches may overshadow Canada's employment report. A stronger-than-expected jobs report in Canada could lower expectations for further Bank of Canada rate cuts in December. This, in turn, may discourage bearish sentiment toward the Canadian dollar.

Technical Analysis

Bullish indicators on the daily chart suggest the potential for further gains. However, repeated failures this week near the 1.4100 psychological level warrant caution for bulls. Sustained strength beyond this level could propel USD/CAD toward the multi-month high of 1.4180, last reached in November. The momentum may extend further toward the 1.4200 psychological level.

On the other hand, a break below the 1.4000 psychological level would expose USD/CAD to continued retracement from its multi-year highs. Spot prices could decline toward the 1.3955 support level and potentially reach the previous week's swing low near 1.3925. Below this, the 1.3900 round level comes into focus, and a break below it could drag spot prices to November's lows.

Key Levels to Watch

Resistance:

  • 1.4100 (psychological level)
  • 1.4180 (multi-month high from November)
  • 1.4200 (psychological level)

Support:

  • 1.4000 (psychological level)
  • 1.3955 (intermediate support)
  • 1.3925 (last week's low)
  • 1.3900 (psychological level)

Conclusion

The trajectory of the USD/CAD pair will largely depend on U.S. labor market data and Canadian employment figures, as well as evolving crude oil price dynamics.

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

GBP/USD Overview – April 18. Powell's Speech: Nothing Positive for the Dollar

The GBP/USD currency pair continued to trade relatively calmly on Thursday, showing only a minimal downward bias. We still can't classify the current movement as a "pullback" or "correction."

Paolo Greco 03:48 2025-04-18 UTC+2

EUR/USD Overview – April 18: The ECB Predictably Cut Rates, and the Market Predictably Ignored It

The EUR/USD currency pair spent most of the day moving sideways. When the European Central Bank meeting results were released, the market saw a small emotional reaction, but nothing fundamentally

Paolo Greco 03:48 2025-04-18 UTC+2

The Dollar Undid Everything Itself

He meant well, but it turned out the usual way. Donald Trump firmly believes that tariffs can replace income tax, generate massive revenue for the budget, and bring about

Marek Petkovich 03:39 2025-04-18 UTC+2

XAU/USD: Analysis and Forecast

Gold is undergoing a corrective pullback today as traders take profits following its recent surge to a new all-time high. This decline, although moderate, is driven by several factors, including

Irina Yanina 12:00 2025-04-17 UTC+2

EUR/USD: Analysis and Forecast

regarding upcoming changes in monetary policy from both the European Central Bank (ECB) and the U.S. Federal Reserve (Fed). Anticipation of a 25 basis point rate cut by the ECB—its

Irina Yanina 11:55 2025-04-17 UTC+2

Is the Euro Ready for Another Rate Cut?

We'll find out very soon whether the euro is once again prepared for the European Central Bank (ECB) to continue easing monetary policy. Today, the ECB is expected to lower

Jakub Novak 11:38 2025-04-17 UTC+2

Powell Sees a More Restrictive Fed Policy This Year

The euro showed little reaction, while the pound slipped slightly against the U.S. dollar following yesterday's speech by Federal Reserve Chairman Jerome Powell. According to Powell, the Fed is currently

Jakub Novak 11:34 2025-04-17 UTC+2

Markets swing between euphoria and panic

If you believe a recession is looming, the rule is simple: sell first, ask questions later. When the National Bureau of Economic Research officially declared a recession in the United

Marek Petkovich 09:55 2025-04-17 UTC+2

No Progress in Negotiations

This week, the European Union and the United States made no significant progress in resolving trade disputes, as officials from President Donald Trump's administration indicated that most of the U.S

Jakub Novak 18:48 2025-04-16 UTC+2

XAU/USD. Analysis and Forecast

Gold continues to draw investor attention, particularly in times of heightened uncertainty in financial markets. Trade Uncertainty: Ongoing uncertainty in trade relations between the U.S. and China makes gold

Irina Yanina 11:50 2025-04-16 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.