USDCAD Analysis
USDCAD is moving in a downtrend line, after breaking the major support area in the 1-hour timeframe. In the higher timeframe monthly chart, USDCAD is falling from the major historical Resistance area.
USDCAD Update
USDCAD is consolidating in the higher timeframe monthly chart at the historical resistance area and in the 1-hour timeframe has broken the descending channel, which leads to the SL price. However, USDCAD still has a chance to fall from the historical resistance area.
Reason: Due to the release of more economic news mentioned below, the market is not making technical movements at this time.
Why USD is Stronger
U.S. Tariffs on Other Countries – Higher tariffs reduce imports, lowering demand for foreign currencies and increasing demand for USD.
Higher U.S. Interest Rates – Investors seek higher returns in U.S. assets, boosting capital inflows and strengthening the dollar.
Global Uncertainty (Safe-Haven Demand) – Economic and geopolitical risks drive investors to hold USD as a safe asset.
Strong U.S. Economy – A robust job market, strong consumer spending, and investment in U.S. stocks attract global capital.
Why CAD is Weaker
Political and Economic Uncertainty – Lack of confidence in the federal government affects investor sentiment.
Large Federal Deficit ($61.9B for 2023–24) – Higher government borrowing and inflation concerns weaken the CAD.
Potential U.S. Tariffs – A possible Trump return raises fears of trade restrictions, hurting the Canadian economy.
Strong U.S. Dollar – Investors favour the USD as a safe-haven currency, reducing demand for the CAD.
Interest Rate Gap – The U.S. Federal Reserve’s higher rates attract investors, making the CAD less attractive.
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