CAD Weakens Amid Tariff Concerns and Falling Oil Prices

Fundamental Analysis

* Canada Dollar Weakness Amid Economic Concerns: The Canadian Dollar is under pressure due to growing pessimism surrounding Canada’s economic outlook. U.S. President Donald Trump’s recent announcement of potential significant tariffs on Canadian goods has raised concerns about a slowdown in Canada’s economic growth. In addition, the persistent drop in oil prices, a key export product for Canada, continues to weigh on the Canadian Dollar. A ceasefire agreement between Israel and Lebanon, ending over 14 months of conflict, may further impact oil prices, potentially diminishing demand for the Canadian Dollar.

Technical Analysis

* Technical Rebound: USD/CAD has shown a rebound after testing the strong support level, with a hammer candlestick formation (H4) signaling potential bullish momentum. The RSI remains above the midline, indicating that the pair may extend its gains toward the next resistance level.

* Resistance and Support: If the bullish momentum continues, USD/CAD could push towards the 1.4140 resistance level. However, if the price fails to break through this resistance, a retracement might occur, with immediate focus on the support level at 1.4050 for potential signs of further decline.

Potential Risks

Investors will closely monitor key U.S. economic data releases, including the Core PCE Price Index, for indications of inflation trends. Meanwhile, investors should also further focus on the tariff details, on Canada, to gauge the likelihood movement for USD/CAD

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Monitoring

Stay updated on US data, global conflict updates, Canada economic outlook and any shifts in the USD/CAD by following PU Xtrader’s financial news page.

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