Title: USD/CAD Price Action Signals Imminent Breakout Towards Bearish Target
Original Source Credit: Economies.com, “The USD/CAD Price Is Getting Ready To Break Our Expected Target – Analysis – 29-10-2025”
The USD/CAD currency pair has been exhibiting increased bearish momentum, edging closer to a critical support level that could trigger a significant downside move. Technical analysis suggests the pair may be on the verge of breaching key support, fulfilling bearish price projections laid out in previous forecasts. With a confluence of technical signals and overarching macroeconomic factors aligning, the pair is potentially set to extend its decline, reaffirming the negative outlook.
This analysis delves into the current technical structure of USD/CAD, explores fundamental factors influencing the Canadian dollar and US dollar, and outlines forecast scenarios traders should monitor over the coming sessions.
Current Technical Overview: USD/CAD
As of late October 2025, the USD/CAD exchange rate is demonstrating a clear bearish structure, driven by sustained pressure below key moving averages and a breakdown of short-term consolidation patterns. The pair had been trading within a downtrend channel, with lower highs and lower lows forming consistently over recent weeks.
Highlights of the technical status:
– USD/CAD is hovering near the 1.3680 level, approaching critical support at 1.3660.
– The 50-day Simple Moving Average (SMA) and 100-day SMA are both sloping downward, reinforcing the bearish momentum.
– The price action is below both the 50-day and 100-day SMA, indicating seller dominance.
– Bears have capitalized on repeated failure to hold above the 1.3750 resistance zone.
– The Relative Strength Index (RSI) has dipped below the midline (50), confirming bearish bias without reaching oversold territory—suggesting more room for downside.
– The near-term support zone at 1.3660 is under threat, and a confirmed break below this level could trigger a continuation toward the longer-term bearish target around 1.3600.
Implications of Breaking Support Levels
The 1.3660 support is pivotal for USD/CAD, acting as both a psychological and technical floor. A decisive daily close below this level can expose the pair to further downside pressure as market participants target fresh lows.
According to the analysis from Economies.com, the pair is gearing up to visit the previously projected target near 1.3600. Once 1.3660 is breached:
– Immediate support will lie near 1.3615, followed by 1.3590.
– Bears may aim for 1.3500 in extended sessions, especially if upcoming Canadian economic data provides a tailwind for the loonie.
– A failure to bounce at expected support levels could open up risks of further declines toward the 200-day SMA, which might lie near the 1.3450 zone in future sessions depending on price action.
Fundamental Drivers Behind USD/CAD Move
Beyond technical indicators, USD/CAD is heavily influenced by macroeconomic data, commodity prices (particularly crude oil), and central bank policy expectations. Several recent and ongoing developments help explain USD/CAD’s bearish tone.
1. Crude Oil Prices Support the Canadian Dollar
– As Canada is a major oil exporter, there is typically a strong correlation between crude oil prices and the strength of the Canadian dollar.
– In recent weeks, crude oil has seen a recovery, particularly Brent Crude and West Texas Intermediate (WTI), on the back of growing Middle East tensions and supply limitations.
– Rising oil prices have bolstered the Canadian dollar, putting downside pressure on USD/CAD.
2. Diverging Monetary Policy Expectations
– The Federal Reserve (Fed) has maintained a relatively hawkish stance throughout 2025, but recent economic indicators such as softening inflation data and weaker consumer spending have tempered expectations for additional rate hikes.
– On the other hand, the Bank of Canada (BoC
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