The impact of oil prices and commodity markets is also analyzed. Its high liquidity and ease of forecasting make this pair attractive for trading. The pair is also in demand by exporters and importers of both countries and international investors seeking to hedge currency risks. As Canada is one of the world’s leading energy exporters, rising oil prices tend to strengthen the Canadian dollar, while falling prices often weaken it. The Canadian dollar, often referred to as the “Loonie,” has historically been correlated with oil prices.
Whether you’re a seasoned market expert or a curious newcomer, this analysis will provide you with essential insights for trading this important currency pair. Recent trends in its exchange rate have highlighted the pair’s responsiveness to economic developments, geopolitical factors and changes in monetary policy, presenting a critical opportunity for forex traders. The USDCAD pair may drop due to rising oil prices, as the Canadian dollar strengthens when crude becomes more expensive. The pair may fluctuate following interest rate decisions by the Fed and the Bank of Canada, inflation, GDP, employment data releases, and oil price fluctuations.
The Brent oil market is consolidating above local lows, which continues to support the CAD as a commodity-linked currency. The Canadian dollar retains relative resilience amid stabilising oil prices and reduced demand for safe-haven assets. The market continues to factor in the Fed’s hawkish rhetoric and uncertainty around the future path of US interest rates. The AUD is supported by the situation in commodity markets and expectations of easier financial conditions in China, which remains Australia’s key trading partner.
This enables the comparison between the average forecast price and the effective close price. In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted. The bigger a bubble on the chart means more participants targeting a certain price level in that particular time horizon.
These features empower forex traders to approach trading the USD/CAD pair with greater confidence and profit potential. FOREX.com presents a standout choice among online forex brokers, offering advanced trading tools, real-time market data and competitive dealing spreads. This phase may see the USD/CAD pair falling or trading between the 1.42 and 1.46 levels over the medium to longer term.
Over the coming week, market participants will focus on US macroeconomic data and any comments from Fed officials that could affect rate expectations. The US regulator continues to maintain a hawkish tone, emphasising the priority of fighting inflation and the need to keep interest rates high for an extended period. After the pair reaches 1.1825, a corrective move is expected, with a likely pullback to the 1.1680–1.1620 area (a test of the broken area from above). Within the current structure, the market suggests a continued upward move towards 1.1825, where the upper boundary of medium-term resistance and the projection of the second wave are located. On the daily EURUSD chart, the market broke decisively and consolidated above the SMA 50 (1.1680), signalling the end of the previous correction phase and a transition to an upward wave. Another factor pressuring the dollar is escalating geopolitical tensions in the Caribbean, which increases global risks and temporarily reduces interest in dollar assets.
Foreign Currency Notes
- While their prolific writing career includes seven books and contributions to numerous financial websites and newswires, much of their recent work was published at Benzinga.
- For short-term speculation, the pair may be attractive due to its high volatility.
- At the same time, markets still lean toward easing later in the year, with pricing heavily skewed toward a December cut.
- At the same time, investors remain cautious about the euro amid weak macroeconomic signals from the eurozone, which limits the pair’s potential for sustained growth.
- The rise in Brent prices provided additional support for the CAD, while unpredictable US foreign and domestic policies are adding to pressure on the USD.
- In addition, the growing adoption of cryptocurrencies and central bank digital currencies could have a substantial impact on traditional foreign exchange markets.
The USDCAD has since declined to 1.10, driven by rising oil prices and a robust Canadian economy. In the early 1990s, the pair traded between 1.15 and 1.40, but the Canadian dollar strengthened in 2002. As you can see on the chart, the USDCAD currency pair has experienced significant fluctuations, reflecting changes in the US and Canadian economies. Military conflicts, political upheavals, the formation of new alliances, and the escalation of existing tensions can significantly destabilize currency markets. The average price is expected to remain unchanged in the first half of the year. The price is expected to fluctuate in both directions throughout the year.
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At the moment, the market is performing the fifth upward wave towards the upper boundary of the Price Envelope at 5,090. A breakout above this level would open the door to a wave towards 5,150. This level is considered key for USDCAD in the structure of this wave. This level is considered key in the structure of the upward wave for EURUSD. After completing the impulse, the market corrected lower towards the 63.00 level, where buying interest emerged.
Our approach integrates technical and fundamental analysis. Investors, traders, and central banks use the USDCAD pair to assess macroeconomic trends and make monetary policy decisions. In early 2026, the exchange rate moved within a narrow range of 1.3814–1.3928 amid uncertainty and a lack of new data.
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In 2025, USD/CAD was highly volatile, reacting to changes in monetary policy in both countries and fluctuations in oil prices. Between 2015 and 2020, USDCAD quotes rose steadily, reaching 1.45 amid the pandemic and falling oil prices. As a result, the Canadian dollar weakened significantly, and the USDCAD rate surged above 1.30.
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USD/CAD: Elliott Wave Analysis and Forecast for 01.08.25 – 08.08.25
Market participants are primarily focused on the risks of a possible US government shutdown in January, which increases dollar volatility and supports demand for alternative currencies. Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. Furthermore, retreating Crude Oil prices undermine the commodity-linked Loonie and further lend some support to the USD/CAD pair.
USD/CAD: Elliott Wave Analysis and Forecast for 05.09.25 – 12.09.25
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- The move is a final impulse, which increases the probability of a local top forming near this resistance level.
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- The USDCAD has since declined to 1.10, driven by rising oil prices and a robust Canadian economy.
- Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, clients or contributors, is provided as general market commentary and does not constitute investment advice.
- This level is considered key for USDCAD in the structure of this wave.
- Furthermore, Canadian Prime Minister Justin Trudeau’s recent resignation on Jan. 6 has further weakened the Canadian dollar due to a rise in political uncertainty.
I’m ready to open a trading account and make money from Forex Additionally, the USDCAD rate is influenced by political events, such as elections or shifts in trade relations between Canada and the USA. However, if the Fed continues its aggressive monetary policy, the US dollar will remain strong, limiting the CAD’s upside potential. If the Fed continues to tighten monetary policy, the US dollar may strengthen, and one may consider USDCAD purchases. Forecasts are not guarantees, ifc markets review and actual price movements can differ significantly.
I wouldn’t exactly go so far as to call crude oil bullish, but I think that we have a situation where it’s at least starting to perk up a bit. This isn’t just the Canadian dollar speaking here, as US tensions with trade barriers continues, that causes a little bit of negative pressure here as well. The pair has dropped below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bears are in control.
The BoC is set to continue easing interest rates through 2025, at least at a faster pace than the Fed is expected to, which could apply pressure on CAD’s already-rising rate differential. Our experts make a USD/CAD update forecasting the possible moves of the Canadian dollar (CAD) – US dollar (USD) pair during the whole year. Ltd., a MakeMyTrip group company, is a currency exchange service provider authorised by the Reserve Bank of India (RBI). Exchanging Canadian dollars at the airport can cost you, dear, anywhere between 5% to 8% compared to a marketplace and therefore should be exercised as a last option only. If you wish to carry more Canadian dollars, you need to carry it digitally like by loading SGD on your forex card or by a traveller’s cheque. So you can calculate the limit upto which you can carry CAD for your Canada trip depending on your earlier consumption of foreign exchange in the current financial year.
The decline is supported by trade and political risks for the US dollar. Recent data showed stagnation in employment levels and a rise in unemployment in Canada, but this failed to exert significant pressure on the Canadian dollar. The Bank of Canada is expected to keep the rate at 2.25%, which in turn would support the CAD and trigger a further decline in the USDCAD rate. The Canadian dollar is awaiting the interest rate decision on 28 January. Trade policies, tariffs, and geopolitical risks affect economic outlooks and investor sentiment, influencing both the Canadian dollar and U.S. dollar demand.
Others expect a rise to 1.4289–1.5420 amid strong volatility driven by unpredictable geopolitical risks. Forecasts for 2030 range from radical changes in the global financial system to a continuation of current trends. According to CoinCodex, the asset may show mixed price action in 2028. Experts at LongForecast anticipate mixed dynamics for the trading instrument in 2028. By mid-year, experts expect the pair to decline to 1.2000, with a subsequent upward reversal. According to CoinCodex data, the asset’s price may settle in the 1.2100–1.3800 range by the end of the first quarter of 2027.