**USD/CAD Analysis: The Pair Grapples with Persistent Bearish Momentum**
*Originally reported by Economies.com on September 3, 2025 — Article expanded and rewritten with additional research and market context.*
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The USD/CAD currency pair continues to face strong downward pressure, struggling to overcome the prevailing bearish trend that has characterized recent price behavior. Despite brief spells of upward correction, the pair has been unable to sustain gains above key resistance levels, pointing to continued weakness in the U.S. dollar relative to the Canadian dollar.
This analysis explores the technical and fundamental underpinnings of the USD/CAD pair’s current trend, touching on recent price patterns, economic indicators influencing the pair, and what traders might expect heading into the near term.
## Current Technical Overview
On Tuesday, September 3, 2025, the USD/CAD pair remained subdued, unable to post any significant breakouts that would signal a reversal of its current downtrend. Key technical observations include:
– The pair remains below the previously noted resistance zone around 1.3620.
– The price is trading beneath the 50-day Exponential Moving Average (EMA), which typically indicates continued bearish sentiment.
– Momentum oscillators, such as the Relative Strength Index (RSI), are positioned below the 50 neutral line, suggesting weak buying interest.
Technical indicators show prices failing to maintain bullish momentum, with lower highs and lower lows reinforcing a bearish structure.
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## Fibonacci Levels and Critical Zones
– The 1.3500 level remains a psychological support zone. If the pair closes below this level, further downside to 1.3440 or even 1.3360 becomes increasingly likely.
– A break above 1.3620 would be the first sign of potential reversal, but confirmation would require a subsequent close above 1.3680.
Until stronger bullish triggers emerge, bears are likely to hold control.
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## Why Is USD/CAD Under Pressure?
Several macroeconomic and geopolitical factors are contributing to the persistent decline in the USD/CAD exchange rate:
### 1. Monetary Policy Divergence
– The U.S. Federal Reserve has maintained a cautious stance in recent months, signaling additional wait-and-see approaches amid cooling inflation numbers and a slowing labor market.
– Meanwhile, the Bank of Canada (BoC) has retained a slightly more hawkish tone, supported by healthier-than-expected domestic economic data and rising core inflation figures.
The diverging perspectives in rate trajectories pressure the U.S. dollar, especially against commodity-backed currencies like the Canadian dollar.
### 2. Crude Oil Support for the Canadian Dollar
As one of the world’s largest oil exporters, Canada’s currency often moves in tandem with global oil prices. Over the past few weeks, oil prices have seen support from:
– Extended voluntary production cuts by Saudi Arabia and Russia
– Disruptions in energy supply chains and shipping in key Middle Eastern and African routes
– Rising demand from recovering Asian economies
WTI crude futures briefly touched $88 per barrel last week, pushing support into the CAD due to Canada’s heavy reliance on fossil fuel exports.
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### 3. Weaker U.S. Economic Indicators
Recent U.S. economic data has hit softer than forecast in several key areas:
– The August Non-Farm Payrolls report showed job growth slowing to 150,000, below expectations of 175,000.
– Consumer Confidence, as published by The Conference Board, dipped for the third consecutive month.
– Inflation data from July and August trended flat, with Core PCE (the Fed’s preferred measure of inflation) up only 0.2 percent month-over-month.
Softening macroeconomic indicators diminish expectations for further Fed rate hikes, contributing to U.S. dollar weakness.
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## USD/CAD Forecast: Short-Term Bearish, Long-Term Cautious
Based on technical, economic, and commodity price conditions, here’s what could unfold from a trading perspective:
### Bearish Case Scenario
Read more on USD/CAD trading.