02.04.202512:22 Forex Analysis & Reviews: USD/CAD. Analysis and Forecast

Today, the USD/CAD pair is trying to stop its previous fall, attempting to anchor above the 1.4300 level. The anticipated announcement on tariffs from U.S. President Donald Trump, expected during the North American session, is creating uncertainty, and traders are likely to stay on the sidelines, waiting to see how the market reacts.

The potential weakness of the Canadian dollar due to new U.S. tariffs is indeed a significant factor. However, the recent rise in oil prices—which traditionally supports the commodity-linked Canadian dollar—may help balance out the negative impact. Interestingly, expectations of rate cuts from the Federal Reserve are also capping the growth of the U.S. dollar, creating a complex situation for the USD/CAD pair and restraining the bulls.

From a technical standpoint, support at the 100-day Simple Moving Average (SMA) is an important level to watch. However, before taking aggressive short positions, it would be prudent to wait for a sustained break and acceptance below the round 1.4300 level. A subsequent decline could drag the pair down toward last week's swing low near 1.4235, with vulnerability extending below the 1.4200 psychological mark. A decisive break below this area could act as a new trigger for sellers, especially since the RSI (Relative Strength Index) has just begun to shift into negative territory.

On the other hand, any further upward move will face resistance at the 50-day SMA and the 1.4350 level. A break above that could trigger a round of short-covering, allowing the pair to reclaim the 1.4400 handle. Further buying interest may open the way toward intermediate resistance near 1.4440–1.4445, with scope for additional gains toward the 1.4480 zone and the key psychological level of 1.4500 and beyond.

However, as long as oscillators remain below 50, the path of least resistance for the pair continues to point to the downside.