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

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

USD/CHF. Analysis and Forecast

The USD/CHF pair is attracting new sellers today, showing signs of weakness under current economic conditions, driven by several key factors. Weak U.S. Dollar: The U.S. Dollar Index, which tracks

Irina Yanina 11:41 2025-04-16 UTC+2

Time works against market

Time is not on Donald Trump's side, nor the side of the US stock market. The longer the uncertainty surrounding White House policy drags on, the more likely it becomes

Marek Petkovich 11:39 2025-04-16 UTC+2

Confrontation Between the U.S. and China Will Negatively Impact Markets (Potential for Renewed Declines in #NDX and Litecoin)

Market optimism, fueled by Donald Trump's active manipulation of the tariff narrative, was short-lived. Traders remain focused on the escalating tensions between the U.S. and China following the U.S. Department

Pati Gani 11:34 2025-04-16 UTC+2

What to Pay Attention to on April 16? A Breakdown of Fundamental Events for Beginners

A few macroeconomic events are scheduled for Wednesday, but some important reports will be released. However, the current key issue is not the reports' significance but how the market will

Paolo Greco 07:06 2025-04-16 UTC+2

GBP/USD Overview – April 16: The Pound Sees No Limits

On Tuesday, the GBP/USD currency pair continued its upward movement. Although this rally was not as strong as last week's surge, the British pound kept rising steadily, with barely

Paolo Greco 03:35 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.