FX.co ★ USD/CAD

The pair is experiencing a second consecutive day of follow-through selling, with the exchange rate dropping back below the 1.4350 mark during the early Asian session on Friday. This downward move is largely driven by a stronger U.S. Dollar (USD), which continues to gain support from several factors. As market sentiment fluctuates, there's potential for further intraday appreciation of the greenback, but several key developments will determine the future trajectory of USD/CAD in the coming days. Fed's Policy Stance Remains a Key Factor for USD/CAD: A critical driver for the USD/CAD pair remains the ongoing uncertainty regarding the Federal Reserve's stance on interest rates. Investors are closely monitoring any hints from the Fed about future rate cuts. With Jerome Powell’s upcoming speech, the market is hoping for further clarity on the Fed's monetary policy approach. If Powell signals that the central bank might take a more dovish stance or provide clearer indications of potential rate cuts, the U.S. Dollar could weaken, potentially exerting pressure on the USD/CAD pair. Technical Analysis of the USD/CAD: The daily chart for the price shows some recovery in oscillators from lower levels, yet they have not yet confirmed a positive bias. This cautionary signal suggests that traders should remain wary before positioning for any significant upward movement. Although the USD is showing strength, the technical indicators are not fully aligned with a sustained bullish trend at this stage.

The next key resistance level for the pair is near the 1.4400 area, which coincides with the 61.8% Fibonacci retracement level. Additionally, the 20-day Simple Moving Average (SMA), currently just ahead of the 1.4156 mark, will act as a critical support level to watch. If USD/CAD fails to clear these levels, the pair could face further downward pressure.