Title: USD/CAD Continues Upward Momentum Amid Market Focus on Economic Indicators
Source: Adapted and expanded from the original article by Economies.com (“The USDCAD is Extending Its Gains – Analysis 01-10-2025”)
The USD/CAD currency pair has been gaining ground over recent sessions, continuing a bullish trajectory that began in late September and persisted into early October 2025. On October 1st, technical and macroeconomic factors contributed to the U.S. dollar’s strength against the Canadian dollar, pushing the currency pair to new short-term highs.
As investors analyze this recent upward movement, several structural, technical, and fundamental drivers need to be considered. This article breaks down the forces at play behind the USD/CAD’s bullish movement, offering a technical analysis, reviewing key economic data, and projecting possible scenarios for the pair’s direction in the coming weeks. Additional context and data have been sourced from Investing.com, ForexLive, and FXStreet to complement the original analysis.
Technical Overview of USD/CAD Performance
The USD/CAD has successfully maintained bullish momentum, primarily driven by technical signals and macroeconomic developments favoring the U.S. dollar. The pair advanced above the 1.3550 resistance level, confirming a continuation of the upward trend. Here’s a closer look at the key technical details:
• Last Observed Levels: On October 1, 2025, USD/CAD traded around 1.3595, a significant increase from last week’s level near 1.3460.
• Support Levels:
– Initial support is now located around 1.3540.
– A stronger support level lies near 1.3460, coinciding with the 50-day simple moving average (SMA).
• Resistance Levels:
– Immediate resistance is seen near 1.3600.
– If the pair breaks decisively above 1.3600, the next target is 1.3665, followed by the psychological barrier of 1.3700.
• Technical Indicators:
– RSI (Relative Strength Index) remains around 64, suggesting the pair is nearing overbought territory but still has room to move higher.
– MACD (Moving Average Convergence Divergence) continues to display a bullish crossover, reinforcing the uptrend.
– The 50-day and 200-day moving averages support further rally potential, with the 50-SMA currently trending above the 200-SMA.
Current Trend Confirmation
Based on the daily chart patterns and momentum indicators:
• The bullish channel remains intact.
• Price action confirms higher highs and higher lows, indicating a classic uptrend formation.
• Break above 1.3550 serves as a strong confirmation signal, with technical bulls now eyeing 1.3700 as a potential medium-term target.
Macroeconomic Fundamentals Driving USD/CAD
Beyond technical analysis, several fundamental variables are influencing price trends between the U.S. dollar and Canadian dollar. Chief among these are developments in crude oil markets, monetary policy expectations, and inflation readings in both countries.
1. U.S. Dollar Strength
The U.S. dollar has experienced widespread strength across several major Forex pairs, including the USD/CAD. Key macroeconomic factors driving demand for USD include:
• Higher Interest Rate Expectations: Although the Federal Reserve left rates unchanged during its recent policy meeting, the central bank’s hawkish tone and persistent inflation concerns have pushed market participants to price in the possibility of another rate hike by December 2025.
• Positive U.S. Economic Data: Recent U.S. economic indicators have surpassed expectations.
– U.S. GDP grew at an annualized rate of 2.5% in Q3 2025.
– Consumer Confidence climbed to 131.4 in September, its highest reading in three months.
– Jobless claims remain low, reflecting strong labor market conditions.
• Treasury Yields: The yield on the U.S.
Read more on USD/CAD trading.