USD/CAD Price Analysis – April 15, 2025
Daily Price Outlook
During the European trading session, the USD/CAD currency pair dropped back toward the 1.3857 level, reversing its short-lived recovery and continuing its downward trend.
This decline happened as the US Dollar (USD) lost strength due to growing market worries about the US economic outlook and unclear signals about the Federal Reserve’s next moves on interest rates.
Investors are now focusing on Canada’s Core Consumer Price Index (CPI) data for March, which is expected later today and could give the pair a new direction.
US Dollar Weakens Despite Earlier Hawkish Fed Commentary
Despite earlier support from hawkish comments by Atlanta Fed President Raphael Bostic, who emphasized that reaching 2% inflation will take time, the US Dollar faced renewed selling pressure. Market participants are becoming more cautious due to concerns over stagflation and mixed opinions about the Fed’s next move.
Deutsche Bank recently updated its forecast, now expecting a 25 basis point rate cut in December, followed by two more rate cuts in early 2026. This change in expectations has reduced demand for the US Dollar, pushing the USD/CAD pair lower again.
Canadian Dollar Gains Ground on Improved Risk Sentiment and Trade Relief
On the other hand, the Canadian Dollar (CAD) strengthened as market sentiment improved after US President Donald Trump decided to exempt certain tech products, such as smartphones and laptops, from tariffs.
This decision eased concerns about the US-China trade tensions and increased demand for risk-sensitive currencies like the CAD.
Moreover, the Loonie received support from falling US bond yields and growing expectations ahead of Canada’s Consumer Price Index (CPI) data release today, which could influence the Bank of Canada’s future policy decisions.
USD/CAD Volatility Ahead as Investors Await Canadian CPI and Central Bank Signals
Looking forward, the USD/CAD pair is expected to remain volatile as inflation data and central bank policies continue to influence market sentiment in both the US and Canada.
Investors are adjusting their positions ahead of Canada’s Core CPI release, as a stronger-than-expected inflation reading could make near-term rate cuts from the Bank of Canada less likely, which would support the CAD.
At the same time, Canada’s 10-year government bond yield dropped to 3.12%, down from a recent peak of 3.27%, indicating caution from investors amid ongoing global economic uncertainties.
Therefore, the expectation of stronger Canadian inflation and a lower bond yield suggests reduced likelihood of Bank of Canada rate cuts, supporting the CAD and potentially causing further downside pressure on the USD/CAD pair.
USD/CAD – Technical Analysis
USD/CAD is trading in a narrow range following an extended downward move, holding below key resistance at $1.3912. This level aligns with a previous consolidation area and coincides with the 1.414 Fibonacci extension of the prior leg. The pair has been unable to break through this ceiling, reinforcing a bearish setup, especially with momentum indicators remaining under pressure.
The 50-period Simple Moving Average (SMA), currently at $1.4076, is sloping downward and far from current price levels, confirming that the medium-term trend remains to the downside. Additionally, the Relative Strength Index (RSI) is at 37.6, with no strong sign of reversal, indicating persistent bearish momentum.
Price continues to test the lower boundary of a short-term consolidation box between $1.3912 and $1.3830, signaling potential for further downside if the lower bound is breached.
If sellers regain control and push below $1.3830, the next support zone comes into focus near $1.3750 — a key Fibonacci projection level. A move beyond that may extend toward $1.3677, where deeper support from the 2.272 extension lies.
As long as price remains below the $1.3912 resistance, short-term bias stays bearish. A break above this level would invalidate the setup and open the way back toward the $1.3965 resistance. Until then, rallies are likely to face selling pressure.
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