Daily Price Outlook
USD/CAD has climbed decisively above a multi-week descending trendline, crossing the $1.4320 level and reclaiming ground above its 50-period SMA ($1.43219).
The move suggests a bullish reversal is gaining traction, with risk-off sentiment acting as a tailwind for the U.S. dollar.
Traders appear increasingly defensive ahead of U.S. President Donald Trump’s anticipated tariff announcement on Wednesday.
The president confirmed the plan will target all countries, intensifying concerns of a broader trade conflict. This uncertainty continues to weigh on the Canadian Dollar (CAD), particularly given Canada’s heavy export reliance on the U.S.
CAD Faces Headwinds Despite Oil Support
The Loonie remains under pressure after Trump reiterated his administration’s plans to enforce a 25% tariff on auto imports. Given that nearly 75% of Canadian exports are U.S.-bound—primarily oil and autos—this development poses significant downside risk. However, rising crude oil prices may offer some near-term support for the CAD.
As Canada is the largest oil supplier to the U.S., an uptick in crude often lends strength to its currency. Nonetheless, the overall backdrop remains fragile, with sentiment driven by U.S. policy unpredictability and global trade realignments.
Supportive Factors for CAD:
Brent and WTI prices remain elevated amid OPEC+ monitoring.
Oil remains Canada's key export; gains here cushion downside.
Friday’s jobs report could offset tariff impact if strong.
Traders Focus on Packed Canadian Data Week
The Canadian calendar is packed with high-impact events this week that could steer the USD/CAD pair.
Key Upcoming Events:
Tuesday, April 1 – Manufacturing PMI: Previous reading: 47.8
Thursday, April 3 – Trade Balance: Forecast: C$3.4B (vs. C$4.0B prior)
Friday, April 4 – Employment Change & Unemployment Rate: Forecast: 10.4K jobs, 6.7% unemployment (vs. 1.1K and 6.6% prior)
With the job market data and trade balance numbers in focus, the Loonie's direction hinges on whether economic strength can counteract external trade risks.
A better-than-expected jobs report could slow USD/CAD’s bullish momentum—but if Canadian data disappoints, the pair may target the $1.44 zone next.
USD/CAD – Technical Analysis
USD/CAD has broken decisively above a multi-week descending trendline, signaling a potential bullish reversal as price reclaims ground above the 50-period simple moving average ($1.43219).
The pair’s upward momentum accelerated following the breakout from the $1.4370 resistance, which now flips to near-term support. Price is now hovering just below the $1.4450 zone, a level last tested mid-March.
The momentum shift is confirmed by the Relative Strength Index (RSI), currently reading 65.88 and trending higher—suggesting sustained buying interest without yet entering overbought territory.
The bullish crossover of the RSI and its moving average line reinforces this positive momentum. The 50-SMA, once resistance, is now providing dynamic support and aligning with the former descending trendline, offering technical confluence.
If price sustains above the $1.4370 breakout level, upside potential remains toward the $1.4450–$1.4526 resistance corridor. Conversely, a drop back below $1.4315 could invalidate the breakout and expose the pair to renewed bearish pressure toward $1.4237 and $1.4160.
Overall, technicals support a bullish near-term outlook, with momentum, structure, and breakout signals all aligned in favor of further gains—provided price holds above the $1.4370 pivot.
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