Usdcad Bullish Momentum Fades

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Usdcad Bullish Momentum Fades

Usd/Cad Bullish Momentum Fades - Scotiabank

According to Scotiabank, the USD/CAD is moving lower with a steady base. This started after reaching 1.43 a few weeks ago which shows that US Dollar is now retreating against its Canadian counterpart.

Scotiabank added that the CAD is facing some obvious risks, which could lead to net losses in the next few weeks. However, the bigger picture shows that USD/CAD gains are now limited.

Boc To End Its Qt Program In 2025

The BoC officials have basically confirmed that the QT program will be ended by mid-2025. This is similar to the previous guidance by the Bank of Canada.

It appears that the BoC will now go back to its normal course, which involves buying the assets slowly. Also, the central bank is likely to end the program sometime in September.

The BoC officials also added that the trade tensions between US and Canada is also a major risk. Overall, it would negatively effect the Canadian economy in the form of higher inflation.

Also, the trade tension will slowdown the economic growth of China. Given this, the BoC will have to do an in-depth analysis on how the tariffs will impact the economy.

For now, the 1.44 level seems to be the pivot for the USD/CAD. The short-term shows that bulls are still in the game although the 1.43 saw a little bit of rejection.

On the weekly chart, it appears that the gains in US Dollar have stalled now. If that's the case, the resistance near the 1.4465 will prevent any further gains in the US Dollar.

On the way down, the support for the USD/CAD is seen near 1.4300 while the next one is at 1.4200. Further CAD strength will open the doors to the 1.4100 and then 1.4000.

The bigger picture is that there are many threats to the Canadian Dollar. The biggest ones are in the form of trade tariffs, higher inflation, and weaker growth.

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