1.3990: Why the Canadian Dollar is sliding toward the resistance zone that could decide the next move
USD/CAD has staged a rebound from recent lows near 1.3730 as markets digest a steady policy stance from the Bank of Canada (BoC) amid renewed United States (US)-Canada trade friction.
The Canadian Dollar (Loonie) is facing a critical technical and fundamental inflection point as it slides toward a resistance zone at 1.3990-1.4030. This zone could determine the next move for the currency pair. Bank of Canada Governor Tiff Macklem maintained the benchmark policy rate at 2.25%, despite rising US-Canada trade tensions and shifting rate differentials.
Societe Generale warns that a failure to surpass this resistance level could keep the pair in a broader downtrend towards the 1.3840 support zone, while ING suggests that persistent US-Canada trade friction and a stronger US Dollar could push USD/CAD even higher towards the 1.4000 level. The latest GDP growth data and solid employment figures support the BoC's policy hold, but trade uncertainty remains a significant drag on the Canadian Dollar.
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