The USD/CAD pair struggled to sustain its overnight rebound from the 1.3780 level—its lowest since October 2024—and came under renewed selling pressure during Tuesday’s Asian session. Spot prices dipped back to the 1.3800 handle, with the pair appearing vulnerable to deeper losses as broad-based U.S. Dollar (USD) weakness persists.
The latest wave of risk aversion stems from mounting concerns over U.S. President Donald Trump’s shifting tariff rhetoric, which has further eroded confidence in U.S. economic growth. Investor sentiment was further rattled by Trump’s renewed criticism of Federal Reserve Chair Jerome Powell, raising questions over the central bank’s independence and adding to the downward pressure on the greenback, now hovering near its lowest level since April 2022.
Meanwhile, crude oil prices have failed to attract significant buying interest, trading below the two-week highs reached last Friday. Fears that escalating trade tensions could tip the global economy into recession—and consequently suppress fuel demand—are weighing on oil, limiting the Canadian dollar’s upside. Additionally, uncertainty surrounding Canada’s snap federal election set for April 28 continues to cloud the near-term outlook for the Loonie.
Technical View: Bearish Momentum Builds Below Key Support Levels
From a technical standpoint, the pair’s recent decisive break below the 200-day Simple Moving Average (SMA)—a key long-term support last breached in October 2024—has served as a fresh bearish catalyst. Daily momentum indicators remain deeply in negative territory, reinforcing the bearish bias and suggesting that any rebound may be short-lived.
Should the pair mount a modest recovery, resistance is likely near the mid-1.3800s. A stronger recovery could spark short-covering and lift the pair toward the 1.3900 level, followed by 1.3950–1.3955 and potentially the 1.3980–1.4000 zone. However, upside attempts are expected to face selling pressure near these levels, particularly around the 200-day SMA.
On the downside, a sustained move below the 1.3780 multi-month low would confirm the bearish trend, opening the door for a slide toward 1.3750–1.3745. Further weakness could expose the 1.3700 mark, with the next significant support emerging in the mid-1.3600s.
In the absence of a clear bullish catalyst, USD/CAD appears poised to extend its decline, with investors closely monitoring U.S. economic data, Canadian political developments, and broader market sentiment in the days ahead.
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