USDCAD Analysis

Introduction

The USD/CAD pair is closely tied to the price of oil, as Canada is a major oil exporter. The price of crude oil often influences the CAD’s strength, with the Canadian Dollar typically appreciating when oil prices rise. The Bank of Canada (BoC) influences the currency through interest rate decisions and its economic outlook. Additionally, the USD/CAD is impacted by US economic performance and trade relations between the US and Canada.

Fundamentals and Interest Rates

The Federal Reserve policy is Dovish with the (FED) current Interest rate 4.5%. Latest change was Dec 18, 2024 (-25bp)%.
On that side the Bank of Canada policy is Dovish and (BOC) has set its interest rate to 2.75% by latest change, Mar 12, 2025 (-25bp).
(FED) Higher interest rates generally lead to higher returns on investments denominated in USD. This tends to attract foreign capital into USD assets.

Based on the economic and macro fundamental data, The Fundamental Bias of USD is Moderate Bearish and for the CAD is Moderate Bearish.
Ziwox considering Neutral bias for this asset and we predict side movement in the long-term.
Our Ziwox A, mid-term Fundamental Score for USD is -3. and Fundamental Score for CAD is 3. So, base on the Fundamental Score, we predict mid-term downside price movement.

Market Overview & Performance

In the current trading session, "London & New York", Market risk sentiment is Strong Risk-OFF. The Gold and Switzerland Frank recorded the strongest performance, while the Australian dollar and Yen are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a 0.98% increase against us dollar.
Euro "EUR", performance has been -0.05% down so far
Pond "GBP", performance has been -0.15% down as of now
Australian dollar "AUD", has dropped by -0.47%
New Zealand dollar "NZD", has dropped by -0.23%
Japanese YEN "JPY", experienced -0.34% fall
Swiss franc "CHF", experienced 0.13% rise so far
Canadian dollar "CAD", has lost -0.06%
Market risk sentiment is OFF, Investors seek safety, favoring safe-haven currencies and assets while selling off riskier investments.Due to the market risk sentiment, USDCAD price increase is likely. Becasue investors become risk-averse from CAD, seeking safety amid uncertainty or market turmoil, leading to a sell-off in riskier assets and a flight to safe havens like the USD, JPY, and gold. Currencies tied to riskier economies (e.g., AUD, NZD) tend to weaken.

Market Sentiment and Positioning

USD COT (Commitments of Traders):

Institutions Net Position on >U.S. Dollar Index is 16835 included 27969 long, 11134 short and 2097 position changed from last week.
So they mainly have a bullish view on this asset and bought USD for higher prices in long-term.
Last week 2097 repositioning Indicates that they are optimistic about higher prices in mid-term.

CAD COT (Commitments of Traders):

Institutions Net Position on >Canadian Dollar is -142410 included 19197 long, 161607 short and 1360 position changed from last week.
So they mainly have a bearish view on this asset and sold CAD for lower prices in long-term.
Last week 1360 repositioning Indicates closed positions and short-term profit-taking.

Retail Traders:

Crowd traders or Retail traders are bullish on the USDCAD with 31% 69% ratio. 12149 long pos and 21841 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability USDCAD prices may continue to rise.

Technical Levels and Support/Resistance

The USDCAD pair is approaching a critical technical support level near 1.41750.
Technical trend is Sell, So If the pair continues to weaken, this support could become a significant area to watch for potential reversal or consolidation.
On the upside, there is key resistance near 1.44674. Technically, If the pair continues to the upside, this resistance level could become a significant area to watch for sell entery potential.