The USD/CAD Is Challenging Resistance: Technical and Fundamental Overview
Originally reported by Economies.com on August 1, 2025
Expanded version by [Your Name or Organization]
The USD/CAD currency pair is currently drawing attention in global forex markets as it tests a significant technical resistance level. As of early August 2025, this pair has witnessed renewed volatility, driven by a combination of chart-based technical momentum and macroeconomic fundamentals influencing both the U.S. dollar (USD) and Canadian dollar (CAD). This revised analysis provides an in-depth look into the pair’s current market behavior, technical configuration, economic drivers, and projected short- to medium-term outlook.
This comprehensive breakdown expands upon the original article published by Economies.com on August 1, 2025, titled “The USD/CAD is attacking its current resistance,” and gives traders and analysts a fuller picture of what is behind this recent price action.
Price Momentum Near Resistance
The USD/CAD began August with pronounced bullish momentum, renewing pressure against a key resistance level near 1.3380. The pair had previously made repeated attempts to breach this level in July but failed to sustain upside movement, often falling back as traders booked profits or reacted to incoming data, such as U.S. inflation numbers and Canadian GDP metrics.
As of the August 1 session:
– The pair is trading near 1.3380–1.3400, a level that coincides with the 61.8% Fibonacci retracement drawn from the June high to July low.
– Bullish price action has been supported by rising U.S. Treasury yields, stemming from investor expectations that the Federal Reserve may hold off on rate cuts longer than initially anticipated.
– The MACD indicator on the 4-hour and daily charts has crossed into positive territory, highlighting growing bullish momentum.
– The 50-day Simple Moving Average (SMA) is beginning to curve upwards and looks poised to cross the 200-day SMA—a potential bullish crossover known as the “Golden Cross.”
If the USD/CAD price sustains above this resistance and closes multiple sessions above 1.3400, the door could open for an extended rally toward the 1.3480 zone and potentially toward the psychological 1.3500 barrier. A failure at this level, however, could initiate another round of profit-taking and consolidation down to mid-range support levels around 1.3300.
Fundamental Drivers Supporting the Rally
Beyond technicals, the pair’s bullish tone is closely tied to the differences in economic trajectory and monetary policy outlook between the United States and Canada. These macroeconomic variables offer additional context for why the USD/CAD is pushing or pausing at resistance levels.
U.S. Economic Strength
– Despite signs of economic cooling, the U.S. economy continues to show resilience in areas such as job growth, consumer spending, and corporate earnings.
– Q2 GDP figures reported a year-over-year growth of approximately 2.1%, easing slightly from Q1 but still above expectations.
– According to the U.S. Bureau of Labor Statistics, the unemployment rate remains close to historic lows at 3.6%, with Non-Farm Payrolls (NFP) for July exceeding forecasts at 235,000 jobs added.
– Inflation, while down from its 2022 highs, remains on the Fed’s radar. The latest Core PCE Price Index rose 0.3% month-over-month, keeping market bets uncertain around the timing of interest rate cuts.
– Fed Chair Jerome Powell delivered a more neutral-than-expected message at the Jackson Hole Symposium, refraining from any firm timeline on monetary easing, reinforcing USD strength.
Canadian Economic Outlook Falters
– The Canadian economy grew just 0.2% in Q2, falling short of expectations and raising discussions about pending headwinds.
– Retail sales growth has slowed, while trade figures have declined due to weakening global demand for oil and other Canadian exports.
– Canada’s July
Read more on USD/CAD trading.