USDCAD Forecast and News


USD/CAD: Rounding bottom bullish pattern highlights 1.2205

USD/CAD retreats to 1.2180 during Wednesday’s Asian session, following a run-up to weekly top the previous day. In doing so, the Loonie pair steps back from the confirmation point of a bullish chart formation, rounding bottom, amid firmer RSI. Other than the chart pattern and RSI, the pair’s successful break above 200-SMA and an ascending support line from June 01 also keep buyers hopeful.

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SPECIAL WEEKLY FORECAST

Interested in weekly USDCAD forecasts? Our experts make weekly updates forecasting the next possible moves of the Canadian dollar-US dollar pair. Here you can find the most recent forecast by our market experts:

USD/CAD Weekly Forecast: Peering over the edge of the rut?

The USD/CAD has been trading in an exaggerated one figure rut for more than a month from, 1.2035 to 1.2160 and back. Friday’s nearly 100-point move brought the pair to the top of that range, just as the drop on June 2 touched the bottom.

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EUR/USD: Corrective pullback fades below previous support, 200-SMA

EUR/USD remains on the back foot, receding taking rounds to 1.2120-25, amid a sluggish Asian session trading on Wednesday. Sellers to keep reins as unless prices cross three-week-old resistance line. Easing bullish bias of MACD adds to the downside signals.

EUR/USD News

GBP/USD: Bears in control, cling to multi-day support near 1.4080

The GBP/USD pair started the session on Wednesday on a lower note. The pair recovered from the low of 1.4034 on Tuesday to close near the 1.4080 mark, where it waivers now. Momentum oscillator hints at downside momentum.

GBP/USD News

USD/JPY poised to refresh multi-week high near 110.30 ahead of FOMC

The buying pressure in the US dollar keeps USD/JPY above the 110.00 mark on Wednesday in the initial Asian trading session. The pair retreats from the earlier high of 110.13, however remain elevated. Yen remains sidelined as market volatility heightens ahead of FOMC.

USD/JPY News

Gold: Bulls looking for a upside correction ahead of Fed

The precious metals sector struggled overnight as investors position for a possible shift in monetary policy from the Fed. Gold prices were down some 0.4% in the final part of the North American day as the US dollar firmed ahead of the outcome of the Fed’s two-day meeting on Wednesday.

Gold News

WTI prints fresh cycle highs through $72

The price of a barrel of oil on Thursday was moving to fresh multi-year highs. Oil prices rose nearly 2% to their highest in more than two years backed by expectations of future demand. A call from Vitol Chief Executive Russell Hardy rallied the bulls, calling for oil prices to keep above $70 a barrel with demand expected to return to pre-pandemic levels in the second half of 2022.

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USDCAD YEARLY FORECAST

How could USDCAD move this year? Our experts make a USDCAD update forecasting the possible moves of the Canadian dollar-US dollar pair during the whole year. Don't miss our 2021 USDCAD forecast!

USDCAD FORECAST 2021

In the USDCAD Forecast Price 2021, our dedicated contributors expect a bearish trend during the year. By the end of the year 2021, the average outlook for the pair is 1.2392. Read more details about the forecast.

From Jan 2020 to Dec 2020, the maximum level for the USDCAD (Canadian dollar US dollar) was 1.4513 (on 19/03/20), and the minimum, 1.2708 (on 15/12/20).

2021 OUTLOOK FOR USDCAD

The recurrence of the pandemic and re-instituted defensive measures in many countries will continue to cripple most economies through the first quarter and with diminishing severity into the second, delaying recovery even as the vaccines hopefully ensure it. Western Europe and the US can probably expect a drop in growth in the first quarter as the renewed closures hamstring economic activity. But once the recovery is underway Canada's large resource and oil-export industries will profit as commodity and oil prices continue higher returning to historical norms for a global expansion.


ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USDCAD

In Canada, the organizations and people that affect the most the moves of the pair are:

  • Bank of Canada (BoC, Canada’s Central bank) that issues statements and decides on the interest rates of the country. Its president is Tiff Macklem.
  • Canadian Government and its Department of Finance that implement policies that affect the economy of the country.
  • CAPP (Canadian Association of Petroleum Producers): Canada being a prominent oil and natural gas producer, the trade organization of that industry is very important.

In the USA, we have:

  • The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case, the Canadian Dollar.
  • Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.

In terms of economic data, we should highlight the Trade Account Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the USDCAD. If a steady demand in exchange for CAD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CAD.

Inflation is another economic value that is important for this pair. It is measured among others by the CPI (Core Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends.


Jerome Powell

Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.

Tiff Macklem

Tiff Macklem was born in Montréal, Quebec, in 1961. He was appointed Governor of the Bank of Canada, effective 3 June 2020, for a seven-year term. He is the tenth governor of the Bank of Canada. As Governor, he is also Chairman of the Board of Directors of the Bank for International Settlements (BIS). He currently chairs both, the BIS Audit Committee and the Consultative Council for the Americas.

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About USDCAD

THE 'LOONIE'

The USDCAD pair tells the trader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency). The 'Loonie' is a gold-coloured coin that was introduced in 1987 and is produced by the Royal Canadian Mint at its facility in Winnipeg.
The most prevalent versions of the coin show a common loon, a bird found throughout Canada, on the reverse and Queen Elizabeth II, the nation's head of state, on the obverse

THE IMPORTANCE OF OIL FOR THE LOONIE

The USDCAD is one of the three so-called “commodity pairs”, together with the following ones: AUD/USD, NZD/USD. These pairs are highly correlated to commodity (especially oil) fluctuations.

Canada is commonly known as a resource based economy being a large producer and supplier of oil. The leading export market for Canada is by far the United States making its currency particularly sensitive to US consumption data and economical health.
Gonçalo Moreira explains the correlations that exist between oil, the USD and the CAD: "If Canada is one of the world's largest producers of oil and oil is such a big part of the US economy, rising oil prices tend to have a negative effect on the USD and a positive effect on the CAD. Here you have two nice correlations.” Then he continues his analysis: “If you are willing to find a pair which is really sensitive to oil prices, then pick the CAD/JPY. Canada and Japan are at the extreme ends of production and consumption of oil. While Canada benefits from higher oil prices, Japan's economy can suffer because it imports nearly all of the oil it consumes. This is another interesting correlation to follow."

ASSETS THAT INFLUENCE USD/CAD THE MOST

  • Commodities: as we already explained, oil is number one, but gold and natural gas are also to be taken into account by the traders.
  • Currencies: JPY and EUR. Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, an NZD/USD.
  • Bonds: CSB (Canada Savings Bonds), CPB (Canada Premium Bond).
    • Indices: S&P/TSX Capped Composite Index (the headline index for the Canadian equity market), S&P/TSX Global Gold Index (index of global gold securities) and S&P/TSX Capped Energy Index (benchmarks for related derivative products of Canadian economic sectors).