**USD/CAD Under Selling Pressure Amid Weak Bullish Momentum: Analysis and Forecast**
*Source: Economies.com – August 11, 2025. Original article by Economies.com Analysts.*
The USD/CAD currency pair has continued to face downward pressure amid weakening buying interest and a series of technical indicators pointing toward increased bearish momentum. Traders and market analysts watching the developments of this forex pair are taking note of critical support and resistance levels that are shaping near-term price movements.
This article seeks to expand on the original insights published at Economies.com regarding the USD/CAD’s bearish outlook while incorporating additional perspectives and relevant data from secondary sources to offer a comprehensive overview of the currency pair’s movements and likely future trajectories.
## Overview of Current Market Conditions
The USD/CAD pair has recently tested key resistance levels but failed to maintain gains due to subdued bullish strength and a shift in market sentiment. Several critical factors have driven this short-term shift in the trend:
– Weakness in the U.S. dollar following revised expectations around the Federal Reserve’s interest rate hikes.
– Stability in crude oil prices, which tends to support the Canadian dollar due to Canada’s significant oil exports.
– Technical patterns that underscore fading bullish momentum around resistance zones.
## Technical Analysis Breakdown
The USD/CAD has been unable to break through the 1.3440 resistance barrier, which has served as a solid ceiling over the past few sessions. A drop below this level is suggesting the continuation of a bearish wave that may deepen in the coming days.
Highlights from technical indicators include:
– The pair dipped below the 50-day Moving Average, indicating an intermediate-term bearish tone.
– Momentum oscillators such as the RSI (Relative Strength Index) are trending lower, consistent with waning bullish pressure.
– The stochastic oscillator entered the overbought territory and has just made a bearish crossover, signaling a possible downside reversal.
## Key Support and Resistance Levels
Understanding the USD/CAD movement requires identifying the crucial technical barriers, both upward and downward, that could serve as inflection points in the near term.
Support Levels:
– 1.3350: The immediate support level, which if breached, may trigger further downside potential.
– 1.3310: A more critical level that serves as a previous demand zone; falling below could indicate deeper losses.
– 1.3260: Psychological support with historical significance.
Resistance Levels:
– 1.3440: Now acting as the short-term ceiling. A clear break above would change the near-term bearish bias.
– 1.3490: Next upside resistance, associated with recent market peaks.
– 1.3560: A higher-level resistance that marks a trend reversal if breached.
## Candlestick Patterns and Market Sentiment
Recent candlestick formations on the 4-hour and daily charts suggest that bears are regaining control. The formation of multiple rejection wicks near the 1.3440 level has added weight to market skepticism over potential upward momentum.
– Bearish engulfing patterns appeared at the peak of minor bullish rallies.
– Long upper shadows have been frequent, indicative of buyer rejection at high prices.
Market sentiment, according to the CFTC’s Commitments of Traders (COT) report, shows a slight reduction in long positions in USD, coupled with increased speculative interest in the Canadian dollar.
## Broader Economic Influences
To understand the USD/CAD trajectory better, it is essential to explore the macroeconomic landscape affecting the U.S. dollar and Canadian dollar.
### U.S. Economic Data
The U.S. economy continues to show resilience, but recent data has suggested the recovery is stabilizing. Key economic indicators include:
– CPI inflation data showed a slight decrease month-over-month, reducing pressure for further Fed rate hikes.
– Jobless claims have been relatively steady, indicating tight labor markets but without accelerating wage inflation.
– The Federal Reserve’s recent statements signal a data-dependent approach, which markets interpret as dovish.
According to analysts at
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