USD/CAD Weekly Forecast: Looming Trump Tariffs Increase Greenback…

• Market members are eagerly awaiting Trump’s inauguration.

• Trump has proposed a heavy tariff on items imported from Canada.

• US inflation knowledge this week revealed delicate underlying value pressures.

The USD/CAD weekly forecast factors north because the Canadian greenback drops forward of Trump’s inauguration.

Ups and downs of USD/CAD

The USD/CAD pair had a bullish week because the Canadian greenback weakened amid Trump tariff fears. In the meantime, the greenback gained regardless of downbeat knowledge because of the weak loonie. 

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Market members had been eagerly awaiting Trump’s inauguration and his coverage adjustments. Notably, Trump has proposed a heavy tariff on items imported from Canada, which is able to doubtless harm the native economic system. Due to this fact, the Financial institution of Canada can be beneath immense stress to chop rates of interest. 

In the meantime, inflation knowledge this week revealed delicate underlying value pressures, supporting bets for Fed price cuts. On the similar time, US gross sales got here in under estimates, indicating easing shopper spending.

Subsequent week’s key occasions for USD/CAD 

Subsequent week, merchants will give attention to financial experiences from Canada, together with inflation and retail gross sales. The inflation report will present the state of value pressures within the nation. Latest figures have proven a slowdown that has allowed the Financial institution of Canada to implement a number of price cuts. A downbeat report would enhance bets for price cuts in 2025, weighing on the Canadian greenback. 

The Financial institution of Canada in late 2024 shifted from specializing in inflation to progress. The economic system was regularly declining amid excessive rates of interest. The retail gross sales report will present the state of shopper spending, additional shaping the outlook for BoC price cuts.

USD/CAD weekly technical forecast: Bullish momentum focusing on 1.4603

On the technical facet, the USD/CAD value is bouncing increased after discovering assist on the 1.4300 key psychological stage. The worth trades above the 22-SMA, and the RSI is in bullish territory. Furthermore, the worth has made a sequence of upper highs and lows, suggesting a strong bullish pattern. 

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Nonetheless, after breaking above the 1.4300 key stage, the worth traded in a good consolidation because the SMA caught up. In the meantime, the RSI made decrease highs, indicating fading bullish momentum, which allowed bears to puncture the SMA line. Nonetheless, bulls returned with renewed momentum and pushed the worth again above the SMA. 

If bullish momentum stays sturdy within the coming week, the worth will doubtless retest the 1.4603 key stage. This can imply the next excessive and a continuation of the bullish pattern.

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