U.S. Dollar Declines After Tariff Announcement, Canadian Dollar Rebounds

USD/CAD hit a high of 1.47920 on Monday, following new tariff announcements by U.S. President Donald Trump. However, the pair later dropped by more than 3.3%, as technical weakness and easing economic pressure weighed on the U.S. Dollar.

✔ The Canadian Dollar (CAD) strengthened due to rising crude oil prices.
✔ The likelihood of U.S. interest rate cuts diminished, causing weakness in USD.
✔ Strong Canadian economic data provided additional support to the local currency.

📌 Key Takeaways for Pakistani Forex Traders:

✅ Rising crude oil prices could further strengthen CAD.
✅ Statements from the U.S. Federal Reserve on interest rates may impact the forex market.
✅ The ongoing downtrend in USD/CAD could create new trading opportunities for investors.

📊 Major Economic Events Impacting the Market

📌 Key U.S. and Global Economic Data Releases That May Affect the Market:

🔹 Wednesday, 15:30 (GMT+2) – U.S. CPI (Inflation) Data
🔹 Wednesday, 17:30 (GMT+2) – U.S. Crude Oil Inventories Report
🔹 Thursday, 09:00 (GMT+2) – UK GDP Report
🔹 Thursday, 09:30 (GMT+2) – Switzerland CPI Data
🔹 Thursday, 15:30 (GMT+2) – U.S. PPI Data & Unemployment Claims
🔹 Friday, 15:30 (GMT+2) – U.S. Retail Sales Report

📌 Pakistani forex traders should closely monitor these releases, as they could influence the direction of USD/CAD.

📉 USD/CAD Technical Analysis – Is Further Decline Possible?

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🔹 USD/CAD lost momentum after hitting 1.47920, breaking below the 20-EMA and 50-EMA, signaling bearish sentiment.
🔹 RSI indicator is below 50, suggesting further market weakness.
🔹 If the 1.42689 support level breaks, more downside potential could be expected, though the 20-EMA and 50-EMA crossover is not yet complete, keeping market direction uncertain.

📌 Key Support Levels:
✔ 1.42689 – Lowest level since February 5
✔ 1.41770 – High from November 26
✔ 1.40958 – 261.8% Fibonacci extension level
✔ 1.39226 – 423.6% Fibonacci extension level

📌 Key Resistance Levels:
✔ 1.43759 – Daily high from February 10
✔ 1.44493 – Weekly pivot point
✔ 1.46298 – Weekly resistance (R1)
✔ 1.47920 – High from February 3

📌 If the price drops below 1.42689, further downside is likely, whereas a break above 1.44493 could signal a bullish reversal.

📊 Fundamental Drivers – Why Is the Canadian Dollar Strengthening?

✔ Consistent rise in crude oil prices – Positive for the Canadian economy
✔ Uncertainty over U.S. tariffs – Creating market instability
✔ Canada’s strong economic data – Building permits increased by 11%
✔ Higher yields on Canada’s 10-year bonds – Supporting the local currency
✔ U.S. Dollar weakness – Driven by Fed policy and inflation concerns

📌 Key Trading Tips for Pakistani Forex Traders:

✅ If USD/CAD declines further, buying CAD could be a profitable opportunity.
✅ If U.S. inflation (CPI) data is strong, USD may recover.
✅ Higher oil prices could further strengthen CAD.

🔍 Final Analysis – Where Are the Best Trading Opportunities in USD/CAD?

✔ For bearish traders: If 1.42689 breaks, further downside is likely.
✔ For bullish traders: If 1.44493 resistance is breached, USD/CAD may rebound.
✔ The Canadian Dollar is benefiting from rising crude oil prices, so keep an eye on the energy market.

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