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- Interest Rate4.5
- Inflation Rate MoM0.1
- Inflation Expectations3
- Retail Sales MoM0
- GDP Growth Rate0
- GDP m/m
- Manufacturing PMI52.9
- Services PMI 52.9
- Unemployment Rate4.1
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- 2.75Interest Rate
- 0.6Inflation Rate MoM
- 4.09Inflation Expectations
- 0Retail Sales MoM
- 0.5GDP Growth Rate
- 0GDP m/m
- 45.6Manufacturing PMI
- 44.3Services PMI
- 7Unemployment Rate
Day Trading
Short Term/Scalp Opportunity
Waiting for confirmations
Swing Trading
Long Term Opportunity
Short at major resistance areas
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Fundamental Bias is Bearish
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Forecast is Bearish
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Trend is SELL
Dynamic resistance at R3 (1.37374) and R4 (1.37616) could be apropos entries
The US Dollar (USD) is the most widely traded currency in the world and the primary reserve currency. It is the official currency of the United States and is often seen as the global standard for trade and investment. The USD’s price is influenced by the monetary policy of the Federal Reserve, inflation levels, and interest rates. Its dominance in global trade makes it highly correlated with other major currencies, especially the Euro and Japanese Yen. Key impact parameters for the USD include US economic growth (GDP), job market conditions, consumer spending, and the Fed’s policy decisions. As a safe-haven currency, the USD often rises during periods of global risk aversion. Its price is also sensitive to geopolitical events, such as US government policy changes and international conflicts.
The Canadian Dollar (CAD) is the currency of Canada, and it is often referred to as the "Loonie" due to the loon bird depicted on the one-dollar coin. The CAD is heavily correlated with commodity prices, particularly oil, as Canada is one of the world’s largest oil exporters. The price of crude oil directly impacts the CAD’s value, making it a commodity-linked currency. The Bank of Canada (BoC) controls the monetary policy for the CAD. Other key price drivers for the CAD include interest rates, inflation data, and Canada’s trade balance. Economic growth in the US, as Canada’s primary trading partner, also affects the CAD, with stronger US demand often supporting a stronger Canadian Dollar. Fluctuations in global oil prices remain the most significant impact factor for the CAD.
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 Weak Bearish.
Ziwox considering Weak Bearish bias for this asset and we expect prices to decline in the long-term.
Our Ziwox A, mid-term Fundamental Score for USD is 1. So, base on the Fundamental Score, we predict mid-term upside price movement.
Market Overview & Performance
In the current trading session, "Sydney", Market risk sentiment is Risk-ON. The Canadian Dollar and Australian dollar recorded the strongest performance, while the Switzerland Frank and Gold are weakest so far.
Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -0.03% decrease against us dollar.
Euro "EUR", performance has been -0.02% down so far
Pond "GBP", performance has been -0.02% down as of now
Australian dollar "AUD", has risen by 0.08%
New Zealand dollar "NZD", has risen by 0.01%
Japanese YEN "JPY", experienced 0.01% rise
Swiss franc "CHF", experienced -0.09% fall so far
Canadian dollar "CAD", has gained 0.13%
Market risk sentiment is ON, This means Investors embrace risk, driving demand for riskier assets and higher-yielding currencies while safe-haven assets weaken.Due to the market risk sentiment, USDCAD price reduction is likely. Becasue investors are optimistic and willing to take higher risk on CAD and leading to increased demand for riskier assets like stocks, commodities, and higher-yielding currencies. Safe-haven assets like the USD, JPY, and gold typically weaken as confidence grows.
Market Sentiment and Positioning
USD COT (Commitments of Traders):
Institutions Net Position on >U.S. Dollar Index is -4282 included 16873 long, 21155 short and 1752 position changed from last week.
So they mainly have a bearish view on this asset and sold USD for lower prices in long-term.
Last week 1752 repositioning Indicates closed positions and short-term profit-taking.
CAD COT (Commitments of Traders):
Institutions Net Position on >Canadian Dollar is -63452 included 22149 long, 85601 short and -10285 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 -10285 repositioning Indicates more sell positions and price pressure in short-term.
Retail Traders:
Crowd traders or Retail traders are bullish on the USDCAD with 55% 45% ratio. 6494 long pos and 5670 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability USDCAD prices may decrease.
Technical Levels and Support/Resistance
The USDCAD pair is approaching a critical technical support level near 1.35705.
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 1.37616. Technically, If the pair continues to the upside, this resistance level could become a significant area to watch for sell entery potential.
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