Fundamental approach:
- USDCAD advanced this week, supported by broad US dollar strength and renewed trade tensions as the US announced higher tariffs on Canadian imports.
- The pair was further buoyed after the BoC left rates unchanged and signaled caution amid persistent core inflation and ongoing trade negotiations.
- Meanwhile, US labor data indicated that job openings were moderating growth while tariff-related uncertainty weighed on risk sentiment.
- The BoC’s decision to keep its policy rate at 2.75% cited domestic economic resilience and the unpredictable US trade policy outlook.
- At the same time, negotiations between Canada and the US over trade terms remained in an “intense” phase, with additional tariffs entering effect 1 Aug, adding to downside risks for the Canadian economy.
- USDCAD may remain elevated next week as markets monitor follow-through from new tariffs and assess further data on US jobs and Canadian trade. Potential progress or setbacks in Canada-US trade talks and upcoming economic releases could influence direction, while central bank policy signals and risk appetite will remain key catalysts.
Technical approach:
- USDCAD formed a Triple-bottom pattern at around 1.3567 and bounced up to break the neckline at 1.3755. The price also broke the descending trendline and closed higher than both EMAs, indicating a potential trend reversal.
- If USDCAD remains above the support at 1.3755 and both EMAs, the price may retest the resistance at 1.3980.
- On the contrary, closing below the support at 1.3755 and both EMAs may lead USDCAD to retest the key support at 1.3567.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
- USDCAD advanced this week, supported by broad US dollar strength and renewed trade tensions as the US announced higher tariffs on Canadian imports.
- The pair was further buoyed after the BoC left rates unchanged and signaled caution amid persistent core inflation and ongoing trade negotiations.
- Meanwhile, US labor data indicated that job openings were moderating growth while tariff-related uncertainty weighed on risk sentiment.
- The BoC’s decision to keep its policy rate at 2.75% cited domestic economic resilience and the unpredictable US trade policy outlook.
- At the same time, negotiations between Canada and the US over trade terms remained in an “intense” phase, with additional tariffs entering effect 1 Aug, adding to downside risks for the Canadian economy.
- USDCAD may remain elevated next week as markets monitor follow-through from new tariffs and assess further data on US jobs and Canadian trade. Potential progress or setbacks in Canada-US trade talks and upcoming economic releases could influence direction, while central bank policy signals and risk appetite will remain key catalysts.
Technical approach:
- USDCAD formed a Triple-bottom pattern at around 1.3567 and bounced up to break the neckline at 1.3755. The price also broke the descending trendline and closed higher than both EMAs, indicating a potential trend reversal.
- If USDCAD remains above the support at 1.3755 and both EMAs, the price may retest the resistance at 1.3980.
- On the contrary, closing below the support at 1.3755 and both EMAs may lead USDCAD to retest the key support at 1.3567.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.