Loonie Faces Bearish Outlook Amid US Tariffs and Economic Slowdown Concerns
The USD/CAD pair remains under pressure, struggling to gain traction as trade tensions and upcoming PMI data weigh on market sentiment. Investors are closely monitoring economic indicators from Canada, the U.S., and key global markets, which could drive further volatility in the pair.
With Canada heavily reliant on exports to the U.S., President Donald Trump’s latest tariff threats have rattled investor confidence, adding pressure on the Canadian dollar (CAD). Meanwhile, technical signals continue to point to further downside risks, reinforcing a bearish outlook for USD/CAD.
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USD/CAD Technical Analysis – Key Levels to Watch
📊 Technical Indicators Signal Continued Bearish Pressure
✅ USD/CAD trades below the 20-period and 50-period EMAs, reinforcing downward momentum.
✅ Momentum Oscillator remains below 100, indicating weak buying interest.
✅ RSI stays under 50, confirming sustained selling pressure.
📈 Resistance Levels to Watch:
- 1.42445 – February 19 high.
- 1.43180 – Weekly resistance (R1).
- 1.44679 – 23.6% Fibonacci retracement.
- 1.47920 – February 3 peak.
📉 Support Levels to Watch:
- 1.40918 – 161.8% Fibonacci extension.
- 1.40082 – Weekly support (S2).
- 1.39432 – 61.8% Fibonacci retracement.
- 1.38446 – 423.6% Fibonacci extension.
🔗 Live USD/CAD Chart on TradingView
Fundamental Overview – Key Market Drivers for USD/CAD
📌 Trade Uncertainty Weakens CAD
- 80% of Canadian exports go to the U.S., making Trump’s 25% tariff threat a major economic concern.
- Industries reliant on cross-border supply chains, like manufacturing and energy, are feeling the pressure.
- Canada faces a critical challenge: diversifying trade and reducing economic dependence on the U.S.
📌 Upcoming High-Impact Economic Events
- Canada Retail Sales Data (CAD) – A strong print could support the loonie, while weak numbers may push USD/CAD higher.
- US Flash Manufacturing & Services PMI (USD) – Any signs of economic slowdown in the U.S. could limit USD gains.
- Eurozone and UK PMI Data (EUR, GBP) – May impact broader market sentiment and risk appetite.
📌 Market Sentiment & USD Strength
- The US Dollar Index (DXY) remains elevated, limiting CAD’s recovery.
- Investors are awaiting FOMC guidance and Fed rate policy shifts for further clarity on USD trajectory.
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Conclusion – What’s Next for USD/CAD?
💡 Market Outlook:
✅ If USD/CAD stays below 1.40918, further losses toward 1.40082 and 1.39432 could unfold.
✅ A break above 1.42445 could see a short-term rebound toward 1.43180 and 1.44679.
✅ Traders should watch Canada’s retail sales report and U.S. economic data for near-term price direction.
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