**USD/CAD Outlook: Golden Cross Signals Bullish Momentum Ahead of Key US and Canadian Economic Updates**
*By Motiur Rahman, originally published at Invezz*
The USD/CAD currency pair has recently been gaining traction, driven by a mix of technical developments and anticipated economic news releases from both the United States and Canada. As the forex markets intensify their focus on inflation, interest rate trajectories, crude oil trends, and monetary policy decisions, traders are closely watching the emergence of a notable bullish technical pattern — a golden cross — signaling potential further upside in the USD/CAD exchange rate.
In this analysis, we breakdown the present USD/CAD market conditions, explore the underlying economic fundamentals influencing the pair, examine key support and resistance levels, and offer an extended outlook for the currency pair. We also assess the impact of upcoming economic data releases and geopolitical factors that could make this pair an attractive target for forex traders moving forward.
### What is a Golden Cross and Why Does It Matter?
A golden cross is a widely followed bullish technical pattern that occurs when a short-term moving average, commonly the 50-day moving average (MA), crosses above a longer-term moving average, such as the 200-day MA.
– This suggests a potential shift in momentum from bearish to bullish.
– It is a sign that recent price trends may continue to the upside.
– Typically, the golden cross is viewed in conjunction with other technical indicators to confirm investor sentiment.
In the case of the USD/CAD pair, this golden cross is seen by many investors and chart analysts as a sign that bullish momentum could be strengthening, especially at a time when the currency market is driven by high-impact data releases and uncertain central bank strategies.
### Technical Overview: USD/CAD Shows Strength
As of the latest chart analysis:
– The 50-day moving average has officially crossed above the 200-day moving average, confirming the presence of a golden cross on daily charts.
– The USD/CAD pair has been oscillating between the 1.35 and 1.38 range in recent weeks, hitting resistance at 1.3785 and support at 1.3650.
– A sustained break above 1.3785 could open the path toward the psychological resistance level at 1.3900.
– On the downside, the 50-day MA near 1.3650 may now act as a strong support level.
Momentum indicators such as the Relative Strength Index (RSI) are maintaining a neutral reading closer to 55–60, indicating there is still room for upside movement before reaching overbought territory.
### Macro-Economic Fundamentals Behind the Move
The USD/CAD currency pair is heavily influenced by relative interest rate policy, commodity pricing (especially crude oil), and economic performance on both sides of the U.S.-Canada border.
Here are the major fundamentals currently influencing the price action:
#### 1. Federal Reserve Monetary Policy
– The U.S. Federal Reserve has held rates steady but left the door open for additional tightening if inflation remains elevated.
– Recent comments by Fed officials indicate a “higher-for-longer” rate narrative, supporting the U.S. dollar.
– Core inflation in the U.S. remains above the Fed’s 2% target, contributing to speculation on future rate moves.
#### 2. Bank of Canada’s Dovish Bias
– In contrast to the Federal Reserve, the Bank of Canada has taken a more dovish approach.
– Although inflation is still persistently high, the Canadian central bank has placed more emphasis on slowing economic growth and rising unemployment.
– Markets are pricing in the possibility that the BoC will pause or even cut rates earlier than the Fed in 2025, further weakening the Canadian dollar.
#### 3. Strength of the U.S. Dollar
– The U.S. Dollar Index (DXY), which measures the greenback’s performance against a basket of major currencies, has remained well supported in the face
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