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16.05.202511:28 Forex Analysis & Reviews: USD/CAD. Analysis and Forecast

Exchange Rates 16.05.2025 analysis

As of Friday, the USD/CAD pair is under pressure for the second consecutive day, driven by a combination of negative factors.

Yesterday's weaker-than-expected U.S. macroeconomic data reinforced market expectations for further interest rate cuts by the Federal Reserve, keeping U.S. dollar bulls on the defensive. Additionally, crude oil prices remain stable near recent highs, which supports the commodity-linked Canadian dollar and adds downward pressure on the USD/CAD pair.

The current price action in USD/CAD can be viewed as a bullish consolidation following a rebound from the yearly low. However, this week's failure to hold above the 200-day simple moving average (SMA) and the psychological 1.4000 level calls for caution among dollar bulls.

Moreover, the Relative Strength Index (RSI) on the daily chart is struggling to gain positive traction. Therefore, it would be prudent to wait for sustained strength above the key psychological level of 1.4000 before anticipating further gains. A confirmed breakout could lift the pair toward an intermediate barrier at 1.4050, followed by a potential move to the round number 1.4100.

On the other hand, the 1.3900 level—which marks this week's low and defines the lower boundary of the short-term range—continues to offer immediate support. A decisive break below this zone would open the door for a move toward the 1.3855 level, en route to the next key support at 1.3800 and the yearly low around 1.3750, reached earlier this month.

*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.

Irina Yanina,
Analytical expert of InstaSpot
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