USD/CAD Price Forecast: Trade tensions to keep Canadian Dollar under pressure
The US Dollar (USD) trades slightly higher to near 1.3863 against the Canadian Dollar (CAD) during the European trading session on Tuesday. The Loonie pair remains broadly as ongoing trade tensions between the United States (US) and Canada have put the Canadian Dollar under pressure.
The Canadian Dollar has been under pressure due to ongoing trade tensions between the United States and Canada, according to TD Securities. The latest escalation in US-Canada trade tensions has reinforced the CAD's role as a carry funding currency, leaving analysts cautious on the Loonie. Investors will closely watch the Bank of Canada's monetary policy decision on Wednesday, which is expected to leave the overnight target unchanged at 2.25%.
The USD has gained slightly against the CAD during the European trading session, trading near 1.3863. Technical analysis shows that USD/CAD is hovering near the 20-period Exponential Moving Average (1.3896) and the 50.0% Fibonacci retracement level (1.3900), suggesting a bearish near-term outlook. On the upside, resistance levels include the 20-period EMA and the 50.0% retracement, while support can be found at the 61.8% Fibonacci retracement and deeper structural levels.
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