empty
10.01.2025 01:00 PM
USD/CAD: Analysis and Forecast

This image is no longer relevant

Today, the USD/CAD pair continues its upward trend for the fourth consecutive day, driven by sustained demand for the US dollar.

The US Dollar Index, which tracks the dollar against a basket of currencies, is approaching a two-year high, supported by hawkish signals from the Federal Reserve. Minutes from the December FOMC meeting indicate a slowdown in the pace of rate cuts, which further supports the dollar.

Additionally, speculation about expansionary policies under US President-elect Donald Trump, potentially driving inflation higher, keeps US Treasury yields elevated, acting as a tailwind for the dollar.

This image is no longer relevant

Geopolitical instability caused by the conflict between Russia and Ukraine, as well as changing dynamics in the Middle East and fears of a trade war, continues to bolster demand for safe-haven assets like the US dollar. At the same time, Trump's tariff threats add uncertainty to Canada's economic outlook, negatively impacting the Canadian dollar.

Markets anticipate that the Bank of Canada will lower interest rates by 25 basis points in January, further undermining the Canadian currency. Despite rising oil prices, which typically support the Canadian dollar, traders remain cautious, maintaining an upward bias in USD/CAD.

This image is no longer relevant

Traders and investors are advised to avoid aggressive directional bets ahead of the release of key monthly employment data for the US and Canada, set to be published later today during the early North American session.

Preliminary expectations suggest that the US economy added 160,000 jobs in December, with the unemployment rate holding steady at 4.2%. In Canada, employment is forecasted to increase by 25,000, with the unemployment rate likely rising to 6.9%. Deviations from these projections could trigger market volatility, creating short-term trading opportunities in the USD/CAD pair.

From a technical point of view, the next move higher will encounter resistance near the supply zone at 1.4422–1.4430, beyond which USD/CAD could attempt to retest the multi-year high of 1.4465, reached in December. Given that daily chart oscillators remain comfortably in positive territory and far from overbought levels, further buying may pave the way for a move toward the psychological level of 1.4500.

From a technical point of view, a corrective pullback may attract buyers around the 1.4350–1.4345 level, limiting declines near the round figure of 1.4300, followed by the weekly low at 1.4275. Further selling pressure could tilt the bias in favor of bears, exposing USD/CAD to an accelerated decline toward the key support level at 1.4200.

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

What to Pay Attention to on April 7? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic events scheduled for Monday. After last week's developments, we believe these events will have no impact on the movements of either currency pair. Nonetheless, today's

Paolo Greco 07:03 2025-04-07 UTC+2

EUR/USD Weekly Preview: U.S. Inflation Reports and the Fate of the "Big Tariffs"

The upcoming week promises to be just as volatile as the previous one. The so-called "big tariffs," which are set to take effect on April 9, are at the center

Irina Manzenko 06:13 2025-04-07 UTC+2

GBP/USD Pair Overview – April 7. The British Pound Delivered a Major Surprise on Friday

The GBP/USD currency pair rose 280 pips between Wednesday and Thursday, only to crash by 340 on Friday. These kinds of "flights" have become a regular occurrence lately. While

Paolo Greco 03:23 2025-04-07 UTC+2

EUR/USD Pair Overview – April 7. Nonfarms and Powell Saved the Dollar

The EUR/USD currency pair lost over 300 pips on Wednesday and Thursday, but Friday brought a strong recovery. No one would have been surprised if the dollar had continued falling

Paolo Greco 03:23 2025-04-07 UTC+2

XAU/USD. Analysis and Forecast

Gold is attracting some sellers for the second day in a row, despite the absence of any clear fundamental catalyst for a decline. Most likely, this is due to trading

Irina Yanina 11:50 2025-04-04 UTC+2

Old market rules broken

Someone is not telling the truth. Donald Trump insists that everything is going well and that the markets will flourish. But the S&P 500 just posted its worst 10-week start

Marek Petkovich 11:10 2025-04-04 UTC+2

The Growth of the Gold Price Has Stopped. What Is the Reason? (There Is a Possibility of a Local Corrective Pullback in #SPX and Bitcoin)

The global market crash triggered by the announcement of sweeping tariffs personally introduced by the U.S. President continues into Asian trading sessions. While the decline has slowed, there is still

Pati Gani 09:09 2025-04-04 UTC+2

What to Pay Attention to on April 4? A Breakdown of Fundamental Events for Beginners

Only a few macroeconomic events are scheduled for Friday, but they may trigger a new storm. The market has not yet recovered from Wednesday evening's events when Trump imposed trade

Paolo Greco 07:29 2025-04-04 UTC+2

GBP/USD Pair Overview – April 4: Does Anyone Still Care About Nonfarm Payrolls and Unemployment?

The GBP/USD currency pair posted a 300-pip upward move from Wednesday evening through Thursday. Given the current situation, this may not end the dollar's decline. To be honest, the fall

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

EUR/USD Pair Overview – 4: Trump's Tariffs Crash the Dollar Once Again

The EUR/USD currency pair gained nearly 300 pips between Wednesday and Thursday. We saw a repeat of the situation in early March when the U.S. dollar fell by 400 pips

Paolo Greco 06:06 2025-04-04 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.