Title: USD/CAD Overcomes Downward Pressure: Technical Analysis and Market Outlook
Original source: Economies.com by Mahmoud Abu Ghandour
Date: September 4, 2025
Link to the original article: [USD/CAD Gets Rid of Negative Pressure](https://www.economies.com/forex/usd-cad-analysis/the-usdcad-gets-rid-of-its-negative-pressure–analysis-04-09-2025-120848)
The USD/CAD currency pair recently demonstrated resilience in the face of selling pressure as it breached a key resistance level, suggesting the continuation of its bullish trajectory. According to analysis by Mahmoud Abu Ghandour on Economies.com, the pair managed to stabilize above the 1.3600 barrier, which had previously capped gains. This technical development could set the stage for further upward movement in coming sessions, aligning with a broader outlook for U.S. dollar strength and Canadian dollar weakness.
In this extended analysis, we build upon Abu Ghandour’s original insights, exploring the technical and fundamental factors shaping the outlook for USD/CAD. We’ll review recent price behavior, important support/resistance levels, central bank influences, oil market dynamics, and macroeconomic drivers that traders should consider. By the end, readers will have a deeper understanding of the current state of USD/CAD and expectations for near-term trading.
Recent Price Behavior: A Bullish Reversal
The USD/CAD pair has been consolidating with a slight bullish bias over recent trading sessions. After facing bearish pressure in the latter part of August, the pair reversed course in early September, breaking past the 1.3600 resistance level, which served as a strong psychological and technical barrier.
Key developments in price action include:
– A sustained breakout above 1.3600 on daily charts, clearing previous resistance
– Formation of higher lows and higher highs since mid-August, signaling a bullish structure
– The pair continues to hover around 1.3630 levels as of September 4, 2025, seeking an upward target of 1.3700
This momentum is supported by consistent movement along the short-term ascending trendline and by bullish indicators on both the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD).
Technical Indicators: Support for Upward Continuation
The following technical indicators currently support the bullish thesis for USD/CAD:
– RSI (14-period): The RSI has bounced above the midline (50), currently hovering around 58, indicating moderate bullish momentum without overbought conditions.
– MACD: A recent crossover above the signal line confirms increasing buying pressure, with histogram bars rising in value and staying positive.
– Moving Averages: The 50-day Simple Moving Average (SMA) has turned upward and crossed above the 100-day SMA, producing a golden cross typically symbolic of mid- to long-term bullish momentum.
– Fibonacci Retracement Levels: USD/CAD appears to have completed a retracement from the 1.3897 high (2025-YTD) to the recent 1.3370 low, nearing the 61.8% retracement level at 1.3635, which is now being tested as support.
Short-term support and resistance levels:
– Immediate resistance: 1.3700, followed by 1.3750 and 1.3820
– Support levels: 1.3600 (now functioning as a floor), 1.3540, 1.3475
Expectations for Today (September 4, 2025):
– Expected price range: Support at 1.3550, resistance at 1.3700
– Daily trend: Bullish
Fundamental Factors: Drivers of Both Currencies
U.S. Dollar Fundamentals
The U.S. dollar has recently regained strength against most major currencies, buoyed by hawkish remarks from Federal Reserve officials and stable macro
Read more on USD/CAD trading.