USD/CAD Price Analysis – March 18, 2025
Daily Price Outlook
During the European trading session, the USD/CAD currency pair maintained its upward trend and stayed above the 1.4300 level. The rise was mainly due to the US Dollar (USD) recovering after recent losses.
Traders remained cautious as they waited for key economic data and central bank decisions, which could impact the pair’s movement.
USD Finds Support Ahead of Fed Meeting but Faces Rate Cut Pressure
On the US front, the broad-based US dollar has recovered slightly from its lowest level since October 2024, driven by repositioning ahead of this week’s crucial Federal Reserve (Fed) meeting. Despite this rebound, USD gains remain limited as markets anticipate multiple rate cuts by the Fed this year, keeping broader pressure on the greenback and affecting USD/CAD movement.
Oil Prices and Trade Developments Support the Canadian Dollar
Another factor that impacts the USD/CAD pair is the rise in crude oil prices, which are near a two-week high due to tensions in the Middle East.
This supports the Canadian Dollar (CAD) since Canada is a major oil exporter. Also, progress in US-Canada trade talks has strengthened CAD, limiting further gains in USD/CAD.
Canada’s Inflation Data and BoC Policy Impact on USD/CAD
On the other side, Canada’s February inflation data, set to be released on Tuesday, could impact the USD/CAD pair. Inflation is expected to rise from 1.9% to 2.1%, which may support the Canadian Dollar (CAD).
The Bank of Canada (BoC) will also publish its core CPI report, which tracks underlying inflation trends. In January, core CPI rose by 0.4% MoM and 2.1% YoY.
The BoC recently cut interest rates by 25 basis points to 2.75%, its seventh consecutive cut due to slowing economic growth.
However, new US tariffs on Canadian steel and aluminum could raise inflation risks, possibly influencing BoC’s future rate decisions and affecting USD/CAD movements.
USD/CAD – Technical Analysis
The USD/CAD pair is trading at $1.42958, showing slight weakness as it struggles to maintain bullish momentum. The price is currently below the pivot point at $1.43084, suggesting that sellers hold control in the near term.
The 50-day EMA at $1.43514 reinforces bearish sentiment, indicating further downside potential if key support levels break.
On the upside, immediate resistance stands at $1.43388, followed by $1.43793 and $1.44214. A break above these levels could indicate renewed buying interest, but momentum remains weak. For bulls to regain control, USD/CAD must decisively close above the 50-day EMA at $1.43514.
On the downside, support at $1.42764 is critical for short-term price action. A break below this level could drive the pair toward $1.42409, with further declines extending to $1.42086. A sustained move below $1.42764 would confirm bearish momentum, potentially leading to deeper losses.
Technically, a break below $1.43080 is likely to accelerate selling pressure, making $1.42573 a key short-term target.
However, if USD/CAD rebounds and moves above $1.43388, sentiment could shift toward a potential bullish correction. Traders should watch for a break below $1.43080 to confirm further downside momentum.
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