**USD/CAD Price Forecast: Uptrend Targets 1.3750 After Breaking Above 50-Day EMA**
*Based on original reporting by FXStreet’s Dilraj Nandha*
The USD/CAD currency pair has experienced a significant bullish breakout, gaining upward traction after surpassing the 50-day Exponential Moving Average (EMA). This development marks a potential turning point in the pair’s near-term market momentum, with bullish investors eyeing a retest of the major resistance level at 1.3750. As of July 28, 2025, the pair’s improved technical structure and a combination of favorable U.S. economic indicators alongside raw material market volatility — particularly in oil prices — provide a potential tailwind for continued upside.
This article explores the latest market dynamics shaping USD/CAD, including technical analysis, macroeconomic drivers from both the United States and Canada, central bank policy divergences, and what to watch in upcoming data releases.
## Recent USD/CAD Price Performance
The pair has climbed steadily, closing above a key technical barrier:
– USD/CAD broke above the 50-day EMA, generally regarded as a strong intermediate trend indicator.
– This break suggests bullish market sentiment, as the EMA often acts as dynamic resistance or support depending on trend direction.
– The price continues to hold comfortably above the 1.3700 psychological level, reinforcing near-term bullish sentiment.
– Strong buying interest emerged near 1.3630 earlier in July, forming a local bottom and providing the basis for the current upside movement.
## Technical Indicators and Price Levels
Technical analysis points to a strengthening bullish structure:
– **50-day EMA**: Now serving as dynamic support around the 1.3660 level. Sustained trading above this level favors further upside continuation.
– **Resistance zone**: Immediate resistance seen near 1.3750, coinciding with the late-May 2025 highs. A confirmed breakout above this level would expose 1.3800 and potentially 1.3860 (2024 year-end highs).
– **Momentum indicators**:
– The Relative Strength Index (RSI) on the daily chart is inching closer to the overbought territory (around 64), a sign of increasing bullish strength without being overextended.
– Moving Average Convergence Divergence (MACD) continues to print green histogram bars, with the signal line trending above the zero mark — a further bullish confirmation.
## Fundamental Drivers Behind USD Bullishness
The U.S. dollar has found renewed buying interest in recent sessions, helped by strong economic data and hawkish Federal Reserve rhetoric. Several fundamental triggers underpin the USD’s strength:
### 1. Robust U.S. Economic Indicators:
– **Q2 GDP growth**: The U.S. economy yielded 2.4% annualized GDP growth in Q2 2025, well above consensus expectations of 1.8%, according to the Bureau of Economic Analysis.
– **Labor market resilience**:
– Weekly Initial Jobless Claims reported at 215,000, staying below the 4-week average and confirming continued labor market strength.
– June Non-Farm Payrolls (released earlier this month) came in at 205,000 against an expected 185,000, suggesting business confidence and economic expansion continue.
– **Retail sales** and **core PCE inflation**, both beating analysts’ forecasts, reduce expectations of near-term interest rate cuts.
### 2. Hawkish Federal Reserve Outlook:
– Recent communications from Federal Reserve officials, including Chair Jerome Powell, have emphasized a “data-dependent but cautious” approach — meaning rate cuts remain off the table until inflation returns sustainably to the 2% target.
– Federal Funds Futures pricing suggests the possibility of only one rate cut by the end of 2025, down from earlier market expectations of two or more.
– A higher-for-longer rate environment supports the greenback, especially relative to the Canadian dollar, which is tied
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