empty
28.05.2025 11:44 AM
USD/CAD. Analysis and Forecast

This image is no longer relevant

The USD/CAD pair has been recovering for the third consecutive day from this year's lowest level, supported by renewed buying interest in the U.S. dollar. Yesterday's optimistic U.S. economic data helped ease recession fears and supported the DXY dollar index, which in turn had a positive impact on USD/CAD.

This image is no longer relevant

However, the combination of factors calls for caution among dollar bulls when positioning for further growth. Investors remain wary amid rising concerns over the deteriorating U.S. fiscal outlook. Expectations are also increasing that the Federal Reserve may cut interest rates at least twice in 2025, which could limit the upward potential for both the U.S. dollar and the USD/CAD pair. Traders are awaiting the release of the FOMC meeting minutes for clues on the future path of rate cuts and to identify better trading opportunities.

In addition, important economic reports are expected this week, including the preliminary Q1 GDP data and the Personal Consumption Expenditures (PCE) Price Index due Thursday and Friday. These figures, together with Canada's monthly GDP and oil price trends, could influence the Canadian dollar and provide new momentum for the USD/CAD pair in the second half of the week.

Moreover, higher-than-expected core inflation data in Canada has undermined hopes for a rate cut by the Bank of Canada in June. This, along with a moderate rise in oil prices, could support the Canadian dollar and thereby cap gains in USD/CAD. It would therefore be wise to wait for stronger follow-through buying before confirming that spot prices have established a short-term bottom.

This image is no longer relevant

From a technical standpoint, the pair must first break above the 200-SMA on the hourly chart before confirming the formation of a short-term bottom. As long as oscillators on the daily chart remain in negative territory, it will be difficult for prices to achieve a sustainable bullish outcome. The nearest resistance lies at 1.3855; a breakout above this level could open the way to the psychological mark of 1.3900. Conversely, a drop below the 1.3800 level would accelerate a decline toward the yearly low.

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

The U.S. Economy Will Suffer More Than Others from Tariffs

Donald Trump is jeopardizing his own economy. This was the conclusion reached by the G-20 countries at their recent summit. According to summit participants, the discussions focused on the trade

Chin Zhao 00:28 2025-06-04 UTC+2

EUR/USD. Failed Assault on the 1.14 Level: Bears Retreat but Do Not Surrender

Buyers of EUR/USD started the trading week vigorously, testing the resistance level at 1.1450 (the upper line of the Bollinger Bands indicator on the daily chart) and updating a six-week

Irina Manzenko 00:27 2025-06-04 UTC+2

Euro: Trouble Has Arrived – Open the Gates!

Trouble came from where it was least expected. Frustrated by its coalition partners' refusal to support its immigration control plans, the Freedom Party dismantled the Dutch government. The country will

Marek Petkovich 00:27 2025-06-04 UTC+2

The dollar cannot find a reason to strengthen

The CFTC report showed that expectations for a reversal in the dollar have not materialized. After three weeks of relative stability, during which the total short position

Kuvat Raharjo 19:16 2025-06-03 UTC+2

The Pound Rises Against All Odds

The manufacturing PMI in May came in above expectations, but that was where all the positivity ended — 46.6 points, still below the expansion zone, and there's no talk

Kuvat Raharjo 19:09 2025-06-03 UTC+2

USD/JPY. Analysis and Forecast

The USD/JPY pair is showing mixed dynamics: despite the general recovery of the US dollar, the Japanese yen is under pressure from intraday sellers amid a combination of negative factors

Irina Yanina 18:27 2025-06-03 UTC+2

GBP/USD. Analysis and Forecast

The GBP/USD pair is attracting sellers today, pulling back from yesterday's high. This pullback is associated with a moderate strengthening of the US dollar, which is exerting pressure

Irina Yanina 18:24 2025-06-03 UTC+2

Traders Didn't Believe the Japanese Regulator

The Japanese yen lost some ground against the US dollar after Bank of Japan Governor Kazuo Ueda hinted today that the central bank may continue to slow the pace

Jakub Novak 11:16 2025-06-03 UTC+2

Market startles monster

Over time, we get used to everything — the good and the bad. Investors have finally come to terms with the fact that they will have to build businesses under

Marek Petkovich 10:44 2025-06-03 UTC+2

Deteriorating U.S. Economic Conditions Bring Fed Rate Cuts Closer (Potential for Continued Decline in #USDX and EUR/JPY Pair)

Although the market has largely stopped reacting to incoming economic data—especially from the U.S.—and is more focused on the geopolitical and economic moves of Donald Trump, who is steering

Pati Gani 09:52 2025-06-03 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.