The USD/CAD currency pair came under renewed selling pressure during Thursday’s European session, retreating from an earlier uptick seen in Asia. After briefly climbing above the 1.4100 level, the pair dropped to a fresh daily low, currently hovering near the 1.4075–1.4070 zone, as the US Dollar (USD) weakened modestly against major currencies.
The broader market sentiment remains buoyed by President Donald Trump’s announcement of a 90-day pause on reciprocal tariffs—a move that has supported global risk appetite and weighed on the safe-haven dollar. In parallel, growing market expectations for multiple interest rate cuts by the Federal Reserve in 2025 continue to keep USD bulls cautious.
Despite a recent bounce, crude oil prices remain under pressure, failing to build on gains from their lowest levels in four years. This limits potential upside for the Canadian Dollar (CAD), which is closely tied to oil prices. As a result, the bearish pressure on USD/CAD remains somewhat restrained, though risks are tilted to the downside.
Technically, the pair has repeatedly failed to reclaim the 100-day Simple Moving Average (SMA), now acting as a resistance zone. The latest pullback, accompanied by bearish momentum indicators on the daily chart, supports a negative near-term outlook. A decisive move below key support around 1.4060–1.4055, followed by the 1.4030–1.4025 zone—near the pair’s year-to-date low—could open the door for a test of the 200-day SMA at the psychological 1.4000 mark.
A sustained drop below 1.4000 would likely embolden bearish traders and signal a deeper correction in the pair’s multi-month trajectory. However, traders are expected to remain cautious ahead of the imminent release of US Consumer Price Index (CPI) data, which may offer new insights into the Fed’s monetary policy path and drive fresh USD volatility.
On the upside, any recovery is likely to face resistance near the Asian session high of 1.4110. Further gains may be capped around the 1.4175–1.4180 region, followed closely by the psychological 1.4200 level. A break above this threshold could trigger short-covering, pushing the pair toward the 100-day SMA, just shy of the 1.4300 level. A sustained move beyond this point would suggest a shift in momentum, favoring a near-term bullish bias.
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