**USD/CAD Forecast: Technical Analysis and Market Outlook for August 6, 2025**
*By: DailyForex.com Analysts*
*Original Source Credit: DailyForex.com*
The USD/CAD currency pair has experienced notable fluctuations in early August trading, reacting to recent shifts in U.S. economic data, global oil prices, and expectations surrounding interest rate policies from both the Federal Reserve and the Bank of Canada (BoC). As of August 6, 2025, traders and investors are closely monitoring critical support and resistance zones, key technical patterns, and upcoming economic developments that are likely to influence the currency pair in the short to medium term.
This article provides a comprehensive, updated analysis of the USD/CAD forecast for August 2025, incorporating insights from technical analysis, macroeconomic indicators, and historical price behavior.
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### Recent USD/CAD Performance: A Quick Overview
– The USD/CAD has shown a moderate bullish bias in the first week of August, recovering from recent lows around 1.3550.
– Price action has continued to test resistance near the 1.3640 area, indicating strong overhead pressure.
– The pair remains well within a broad trading range that began forming in mid-June 2025.
Recent volatility in the Canadian dollar has been partly driven by oil price fluctuations and market speculation surrounding the Canadian central bank’s next monetary policy steps. Meanwhile, the U.S. dollar benefitted from improving labor market data released at the start of August.
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### Technical Analysis: USD/CAD on the 4-Hour and Daily Charts
Technical analysis remains a vital tool for forecasting short-term movements in the foreign exchange market. Recent price activity on both the 4-hour and daily USD/CAD charts presents significant clues about upcoming market dynamics.
**Key Support and Resistance Levels**
– **Immediate Resistance:** 1.3640
Price has struggled to break definitively above this zone. A breakout could indicate renewed bullish momentum.
– **Next Resistance Level:** 1.3685–1.3700
If 1.3640 is breached, this zone could act as the next upside target due to historical price congestion.
– **Immediate Support:** 1.3570
Previously tested twice since July’s end, this level has acted as a strong rebound point.
– **Critical Support:** 1.3500
Below this zone, the bullish bias starts to erode, and the possibility of a broader downward shift emerges.
**Trend Analysis**
– The USD/CAD is currently hovering above its 50-period moving average on the 4-hour chart, indicating short-term bullish momentum.
– However, the daily Relative Strength Index (RSI) sits around the 55–60 range, suggesting a non-overbought but slightly bullish condition. Momentum remains moderate.
– Bollinger Bands are beginning to tighten, often a precursor to a breakout volatility phase. Traders should remain vigilant for an impulsive move either up or down.
**Chart Patterns**
– Recent candles form what appears to be a consolidation or rectangle pattern between 1.3570 and 1.3640. This suggests indecision between buyers and sellers.
– A breakout from this rectangle will likely determine the short-term trajectory for the pair.
**Technical Forecast Summary**
– If the price sustains above the 1.3640 level, the next target range should be 1.3700–1.3720.
– Conversely, a breakdown below 1.3570 and especially the psychological level of 1.3500 will open doors to a potential decline toward 1.3440–1.3460.
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### Fundamental Drivers Behind USD/CAD Movements
The USD/CAD exchange rate is significantly influenced by macroeconomic fundamentals, including interest rate differentials, commodity prices, and overall sentiment in global markets.
**1. U.S. Economic Data**
– The U.S. nonfarm payrolls report for
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