USD/CAD: Buy or Sell?
ScoreCurrent Level: Around 1.3681.
Forecasts: A consolidation period is expected through July (target ~1.3654), with a potential rise towards 1.3852 by October. The overall trend for the second half of 2025 is anticipated to be bullish, with some analysts forecasting a move towards the 1.4000-1.4700 range.
The USD/CAD pair is currently trading near 1.3681, consolidating after a rebound from its June lows. Recent dynamics have been shaped by stronger-than-expected U.S. employment data, which supports the US dollar, and falling oil prices, which typically weigh on the Canadian dollar. The monetary policy divergence between the U.S. Federal Reserve (rate at 4.5%) and the Bank of Canada (rate at 2.75%) also provides a fundamental tailwind for the pair. According to our analysis, the current phase above key support at 1.3550 could present opportunities. A break above resistance at 1.3750 could signal upward momentum towards a 1.3850 objective.
The essential information about USD/CAD
The U.S. economy's health directly impacts the CAD, as over 80% of Canadian exports go to the U.S. Strong American economic data often boosts USD/CAD.
The interest rate differential between the U.S. Federal Reserve (4.5%) and the Bank of Canada (2.75%) provides fundamental support for the U.S. dollar, putting upward pressure on the pair.
As a major oil exporter, Canada's dollar has a strong negative correlation with crude oil prices. When oil prices fall, as they have recently, the Canadian dollar typically weakens, causing USD/CAD to rise.
- ✅Excellent liquidity, representing over 5% of daily forex market volume.
- ✅Strong, clear correlation with oil prices, offering a fundamental analysis angle.
- ✅High responsiveness to key economic data from the U.S. and Canada.
- ✅Widely available for trading on virtually all forex and CFD platforms.
- ✅Consistent volatility provides frequent opportunities for short and medium-term traders.
- ❌High sensitivity to oil price swings can lead to sudden, sharp movements.
- ❌Vulnerable to political shifts in U.S.-Canada trade policies and tariffs.
Score- ✅Excellent liquidity, representing over 5% of daily forex market volume.
- ✅Strong, clear correlation with oil prices, offering a fundamental analysis angle.
- ✅High responsiveness to key economic data from the U.S. and Canada.
- ✅Widely available for trading on virtually all forex and CFD platforms.
- ✅Consistent volatility provides frequent opportunities for short and medium-term traders.
USD/CAD: Buy or Sell?
- ✅Excellent liquidity, representing over 5% of daily forex market volume.
- ✅Strong, clear correlation with oil prices, offering a fundamental analysis angle.
- ✅High responsiveness to key economic data from the U.S. and Canada.
- ✅Widely available for trading on virtually all forex and CFD platforms.
- ✅Consistent volatility provides frequent opportunities for short and medium-term traders.
- ❌High sensitivity to oil price swings can lead to sudden, sharp movements.
- ❌Vulnerable to political shifts in U.S.-Canada trade policies and tariffs.
Score- ✅Excellent liquidity, representing over 5% of daily forex market volume.
- ✅Strong, clear correlation with oil prices, offering a fundamental analysis angle.
- ✅High responsiveness to key economic data from the U.S. and Canada.
- ✅Widely available for trading on virtually all forex and CFD platforms.
- ✅Consistent volatility provides frequent opportunities for short and medium-term traders.
- USD/CAD in brief
- Price: Trend and Real-Time Chart
- USD/CAD Forecast: Should You Invest in This Currency Pair?
- Trading Profile: How to Trade the Pair Effectively?
- Our 10 tips for trading the USD/CAD
- How to trade the USD/CAD pair?
- The latest news on the pair
- FAQ
Why trust Hellosafe?
At HelloSafe, our expert has been monitoring the USD/CAD pair for over three years. Every month, hundreds of thousands of users in France trust us to analyze market trends and identify the best investment opportunities. Our analyses are published for informational purposes only and do not constitute investment advice.
USD/CAD in brief
| Element | Detail |
|---|---|
| 📛 Pair name | USD/CAD |
| 🗂️ Pair type | Major pair |
| 🌍 Concerned regions | United States / Canada |
| 💶 Base currency | USD (United States Dollar) |
| 💵 Quoted currency | CAD (Canadian Dollar) |
| 📊 1-month variation | +1.15% |
| 📉 Average volatility (30-day rolling, in %) | 0.65% |
| 📈 12-month high | 1.4794 CAD |
| 📉 12-month low | 1.3419 CAD |
| 💹 Current price | 1.3681 CAD (as of July 10, 2025) |
Price: Trend and Real-Time Chart
The USD/CAD exchange rate, often nicknamed the "Loonie," is a crucial barometer of the economic relationship between the United States and Canada. As one of the most traded currency pairs globally, its movements reflect the intricate dance between the monetary policies of the U.S. Federal Reserve (Fed) and the Bank of Canada (BoC), the health of both economies, and the significant impact of commodity prices. Key drivers include interest rate differentials, employment and inflation data from both countries, and the price of crude oil, as Canada is a major oil exporter. For Canadian investors and businesses, understanding the dynamics of USD/CAD is essential for hedging, trading, and making informed financial decisions.
| Period | Approximate Rate | Change (%) |
|---|---|---|
| 1 week | 1.3680 | +0.75% |
| 1 month | 1.3650 | +0.23% |
| Year-to-date (YTD) | 1.4390 | -4.96% |
| 12 months (range) | 1.3419 - 1.4794 | +0.34% (high: 1.4794, low: 1.3419) |
The average daily volatility for USD/CAD over the last 30 days has been approximately 70-80 pips. This level of intraday movement is significant and creates both opportunities and risks for active traders. High volatility means the pair can experience substantial price swings within a single trading session, which can be leveraged for short-term gains but also requires disciplined risk management, including the use of stop-loss orders to protect capital.
The pair is currently in a consolidation phase after a significant decline over the last six months. Recent price action shows USD/CAD testing major resistance around the 1.3685 - 1.3750 zone, with technical indicators presenting a mixed picture. While short-term moving averages suggest selling pressure, longer-term ones still signal underlying buying interest. A strong technical support level has formed near 1.3550, where a potential double-bottom pattern could be developing, hinting at a possible bullish reversal. Fundamentally, the pair is caught between the downward pressure on the Canadian dollar from falling oil prices and the broader market uncertainty stemming from U.S. trade policies.
USD/CAD Forecast: Should You Invest in This Currency Pair?
As of mid-2025, the USD/CAD currency pair is navigating a landscape of significant economic uncertainty, caught between divergent monetary policies and shifting market sentiment. The pair is currently in a consolidation phase, trading within a relatively defined range as investors weigh the Federal Reserve's recent rate cuts against the Bank of Canada's more cautious stance. This market indecision is reflected in the pair's recent volatility, which has been contained between key technical levels, awaiting a strong catalyst to determine its next directional move.
Fundamental analysis
The primary driver for USD/CAD remains the divergence in monetary policy between the U.S. Federal Reserve (Fed) and the Bank of Canada (BoC). With the Fed having lowered its key interest rate to 4.50% and the BoC holding steady at 2.75%, the interest rate differential currently favors the U.S. dollar. However, future movements will depend heavily on upcoming inflation and employment data from both countries. Stronger-than-expected U.S. economic data could delay further Fed rate cuts, strengthening the USD. Conversely, persistent inflation in Canada could force the BoC to adopt a more hawkish tone, supporting the CAD. Traders are also closely watching renewed trade tensions and their potential impact on Canadian exports.
Key economic publications to monitor:
- U.S. Non-Farm Payrolls (NFP) and Canadian Labour Force Survey (LFS): To gauge the health of the job markets.
- Consumer Price Index (CPI) data for both the U.S. and Canada: To track inflation trends and anticipate central bank actions.
- GDP growth figures: To assess the overall economic performance of each country.
- Bank of Canada (BoC) and Federal Open Market Committee (FOMC) meetings: For forward guidance and interest rate decisions.
Good to know
The Canadian Dollar is a commodity-linked currency, and its value is strongly influenced by the price of crude oil (WTI), as Canada is a major oil exporter. Typically, a rise in oil prices tends to strengthen the CAD (pushing USD/CAD down), while a fall in oil prices weakens it (pushing USD/CAD up). The pair is also sensitive to broader market risk sentiment, often rising when global risk aversion increases.
Technical analysis
The current technical picture for USD/CAD points to a period of consolidation and indecision. The pair is trading in a range, struggling to find a clear direction.
- Trend: The short-term trend is neutral. The price is oscillating between well-defined support and resistance levels, with moving averages providing conflicting signals (short-term MAs suggest selling pressure while long-term MAs indicate underlying support).
- Support and Resistance:
- Key Support: A strong support zone is established around the 1.3550 - 1.3560 area.
- Key Resistance: Major resistance is found near 1.3685, with a more significant ceiling at the 1.3750 level.
- Indicators: Technical indicators reflect the market's uncertainty. The RSI (Relative Strength Index) is hovering near the neutral 50 mark, while the MACD shows a slight bullish bias, countered by other oscillators suggesting selling pressure. This mixed outlook reinforces the range-bound nature of the pair.
- Potential Scenarios: Traders are watching for a potential double bottom pattern forming near the 1.3550 support level, which, if confirmed, could signal a bullish reversal. A decisive break above the 1.3750 resistance would be needed to confirm an uptrend. Alternatively, a firm rejection from this resistance could send the price back down to test the support zone once more.
Trading Profile: How to Trade the Pair Effectively?
The USD/CAD pair, often referred to as "The Loonie," is a favorite among forex traders due to its unique characteristics. As a major currency pair, it boasts excellent liquidity and is readily accessible with competitive spreads. Its volatility is closely tied to commodity prices, particularly crude oil, as well as the monetary policies of the U.S. Federal Reserve and the Bank of Canada. This blend of factors creates distinct and frequent trading opportunities for traders of all levels.
Recommended trading strategy
| Style de trading | Pertinence sur USD/CAD | Pourquoi ? |
|---|---|---|
| Scalping | High | The pair's high liquidity ensures tight spreads, which is crucial for scalpers aiming to profit from small, rapid price changes, especially during news events. |
| Day trading | Very high | Strong intraday movements are common, driven by oil price fluctuations and simultaneous economic data releases from the U.S. and Canada. |
| Swing trading | Very high | Divergence in monetary policy between the Bank of Canada and the Fed, along with multi-week trends in oil prices, creates clear opportunities for swing traders. |
| Long terme | High | The pair is influenced by long-term fundamental factors such as interest rate differentials, trade balances, and structural shifts in the energy markets. |
Maximum volatility hours
The USD/CAD is most active during the North American trading session, especially when key economic data is released from both countries.
| Time slot (CET) | Activity level |
|---|---|
| 09:00 - 14:00 | Low to Moderate Activity begins to pick up towards the end of the European session. |
| 14:00 - 22:00 | Peak The North American session is fully open, bringing maximum volume, liquidity, and volatility. |
| 22:00 - 02:00 | Decreasing Liquidity thins out as the trading day winds down. |
Activity begins to pick up towards the end of the European session.
The North American session is fully open, bringing maximum volume, liquidity, and volatility.
Liquidity thins out as the trading day winds down.
Expert tip
For active trading, the most opportune window is between 14:00 and 18:00 CET. This period corresponds to the morning session in North America and overlaps with the close of the European session, resulting in the highest liquidity and the most significant price movements.
Liquidity and traded volume
- Market Share: USD/CAD consistently ranks as one of the most traded currency pairs, accounting for over 5% of the total daily forex market volume.
- Average Daily Volume: The pair benefits from extremely high liquidity, ensuring that large orders can be executed with minimal slippage.
- Typical Spreads: Spreads are generally tight, typically ranging from 1 to 2 pips with most retail brokers.
Recommended leverage and risk management
In Canada, forex leverage is regulated by the Canadian Investment Regulatory Organization (CIRO). The maximum leverage for major pairs like USD/CAD is typically around 1:50 for retail clients. It is crucial to use leverage that matches your experience level and risk tolerance.
- Beginner: Start with very low leverage, such as 1:5 to 1:10, to limit potential losses while learning.
- Intermediate: Traders with a proven strategy can consider leverage in the 1:10 to 1:25 range.
- Advanced: Experienced traders may use higher leverage, up to the maximum of 1:50, but only with strict risk management protocols in place.
Watch out!
Effective risk management is the cornerstone of successful trading. Always implement a stop-loss order for every position to pre-define your maximum risk. A widely accepted rule is to never risk more than 1-2% of your trading capital on any single trade.
Our 10 tips for trading the USD/CAD
| Tip | Why it's important |
|---|---|
| 1. Watch the price of oil (WTI) | The Canadian dollar is a commodity currency with a strong inverse correlation to oil prices. When oil prices rise, the CAD typically strengthens, causing USD/CAD to fall. |
| 2. Follow the Bank of Canada (BoC) | BoC interest rate decisions and monetary policy statements are the primary drivers of the Canadian dollar. Pay close attention to their outlook on inflation and growth. |
| 3. Monitor US Federal Reserve (Fed) policy | The interest rate differential between the BoC and the Fed is a key long-term driver. A more hawkish Fed relative to the BoC will generally push USD/CAD higher. |
| 4. Trade during the North American session | The highest liquidity and volatility for USD/CAD occur between 8:00 AM and 5:00 PM EST, when both Canadian and US markets are fully active. |
| 5. Understand the impact of employment data | The monthly employment reports from both Canada (Labour Force Survey) and the US (Non-Farm Payrolls) are high-impact releases that cause significant volatility. |
| 6. Acknowledge its "range-bound" nature | USD/CAD often consolidates within well-defined ranges for extended periods. Identifying these key support and resistance levels is crucial for range-trading strategies. |
| 7. Use leverage with caution | While a major pair, sudden moves in oil prices or unexpected policy shifts can cause sharp spikes in volatility. Conservative leverage protects your capital. |
| 8. Respect psychological price levels | The pair is sensitive to round numbers (e.g., 1.3500, 1.3600). These levels often act as strong psychological support or resistance where price can stall or reverse. |
| 9. Keep an eye on US-Canada trade relations | As each other's largest trading partners, any news regarding trade policies, tariffs, or agreements can have a direct impact on the exchange rate. |
| 10. Set a non-negotiable stop-loss | Given the potential for sudden volatility, every trade must have a predetermined stop-loss to manage risk and protect your trading account from significant losses. |
Effective strategies on USD/CAD
| Strategy | Description | Relevance on USD/CAD |
|---|---|---|
| Breakout | Entering a trade when the price moves decisively through a key support or resistance level, often driven by a fundamental catalyst. | Highly relevant. Breakouts frequently occur following major oil price movements, BoC/Fed announcements, or high-impact employment data releases. |
| Technical Rebound | Also known as range trading. This involves buying at a strong, established support level and selling at a firm resistance level. | Very effective. The pair's tendency to trade within defined channels makes this a reliable strategy during periods of market consolidation. |
| News Trading | Placing trades based on the outcome of scheduled economic announcements. This requires speed and a clear plan for entry and exit. | Crucial for this pair. Trading the reaction to oil inventory reports (EIA), central bank meetings, and employment figures is a core strategy for many USD/CAD traders. |
| Moving Averages | Using moving averages (e.g., 50-day and 200-day) to identify the direction of the medium-to-long-term trend and to spot potential entry signals on pullbacks. | A solid approach for filtering trades. It helps traders align with the dominant trend, which is often driven by underlying fundamentals like monetary policy. |
Backtests and historical behaviors
Historically, USD/CAD exhibits behaviors closely tied to its key drivers. Its historical variation zone is often wide, with the 52-week range in the report (1.3419 - 1.4794) illustrating its capacity for significant trends. In terms of seasonality, the Canadian dollar can exhibit strength during periods of rising energy prices, which may not follow a strict calendar pattern but is linked to global growth cycles. The pair's average monthly performance often follows persistent trends; once a direction is established based on a dominant theme (like a shift in oil prices or monetary policy), it can last for several months. Backtesting reveals that the most volatile days of the week are typically Wednesday, due to the weekly EIA oil inventory reports, and Friday, when key employment data for both Canada and the U.S. is often released.
How to trade the USD/CAD pair?
| Step | Description |
|---|---|
| Choose a reliable broker | Select a broker regulated in Canada by the Canadian Investment Regulatory Organization (CIRO). Ensure they offer competitive spreads on USD/CAD, reliable execution speeds, and a platform that suits your trading style. |
| Understand the fundamentals | Track the key drivers of USD/CAD: oil prices (WTI), which have a strong negative correlation with the pair, and the monetary policies of the Bank of Canada (BoC) and the US Federal Reserve (Fed). Monitor economic data like employment reports and GDP from both countries. |
| Analyze the charts | Use technical analysis to identify trends and entry/exit points. Pay attention to key support and resistance levels (e.g., support at 1.3550, resistance at 1.3750), and use indicators like the RSI and MACD to gauge momentum and potential reversals. |
| Define your trading strategy | Develop a clear strategy based on your analysis. This could be a fundamental strategy (e.g., trading based on oil inventory reports) or a technical one like trend-following with moving averages or range-trading between established support and resistance levels. |
| Place your orders and manage risk | Always use stop-loss orders to limit potential losses and take-profit orders to secure gains. Apply sound money management by risking only a small percentage (e.g., 1-2%) of your trading capital on any single trade to ensure long-term sustainability. |
| Monitor your positions and adjust if needed | Actively manage your open trades. Stay aware of the economic calendar for upcoming announcements from the BoC, Fed, or major oil data releases that could cause volatility. Be prepared to adjust your stop-loss or take-profit levels as market conditions change. |
The latest news on the pair
On July 9, 2025, the price of West Texas Intermediate (WTI) crude oil experienced a sharp decline of 2.44%, settling below key support levels. As oil is Canada's primary export, this significant drop in prices immediately weakened the Canadian dollar. Consequently, the USD/CAD pair rallied, breaking through the 1.3650 level and testing resistance near 1.3685 as investors shifted away from the commodity-linked CAD.
On July 4, 2025, the latest U.S. labour market data showed initial jobless claims came in better than expected at 227,000, against a forecast of 235,000. This sign of continued strength in the U.S. economy bolstered the American dollar across the board. In response, the USD/CAD pair saw a notable uptick, moving from its daily lows to challenge the 1.3670 mark as the greenback gained favour.
On June 28, 2025, the Federal Reserve concluded its policy meeting by reaffirming its decision to maintain the federal funds rate at 4.5%. This stance preserves the significant interest rate differential over the Bank of Canada's 2.75% rate, making the US dollar more attractive for yield-seeking investors. The confirmation provided underlying support for the USD/CAD, helping it stabilize above the 1.3600 psychological level.
On June 12, 2025, the Bank of Canada announced its decision to hold its key interest rate steady at 2.75%, in line with market consensus. While the move was expected, the central bank's accompanying statement expressed ongoing caution about domestic economic performance. This decision helped anchor the Canadian dollar, preventing a more substantial sell-off and causing the USD/CAD to consolidate within a tight range around 1.3620 for the session.
FAQ
Quelle est la tendance actuelle de USD/CAD ?
The current trend for USD/CAD is largely neutral and consolidative, as the pair trades within a defined range. It is currently finding significant resistance near the 1.3685-1.3750 area, while key support holds around the 1.3550 level. This sideways movement reflects the market's uncertainty, caught between the influence of a strong U.S. dollar, supported by a favourable interest rate differential, and a Canadian dollar that is highly sensitive to fluctuating oil prices and Bank of Canada policy decisions.
Est-ce le bon moment pour acheter USD/CAD ?
Deciding whether to buy USD/CAD requires a nuanced approach, as conflicting signals create uncertainty. A bullish scenario would depend on a sustained break above the key resistance zone of 1.3750, potentially triggered by falling oil prices or hawkish U.S. economic data. Conversely, a rejection at this level or a drop below the 1.3550 support could signal further weakness. Investors should consider their own risk tolerance and wait for a clear catalyst before committing, as the pair is currently in a state of equilibrium.
Peut-on trader USD/CAD avec un petit capital ?
Yes, USD/CAD is one of the most suitable pairs for traders with smaller capital. As a major currency pair, it boasts extremely high liquidity, which translates into very tight spreads and lower transaction costs. Its volatility is generally more moderate than that of exotic pairs, making it easier to manage risk. The availability of leverage allows traders to control larger positions, but it is crucial to use strict risk management, such as small trade sizes and stop-losses, to protect your capital.
Quels sont les meilleurs horaires pour trader USD/CAD ?
The best time to trade USD/CAD is during the overlap of the London and New York trading sessions, typically between 8:00 AM and 12:00 PM EST. This is when trading volume and liquidity are at their peak, leading to tighter spreads and more significant price movements. Volatility is also highest on days with major economic announcements from either the U.S. or Canada, such as employment reports (NFP), inflation data (CPI), or central bank interest rate decisions.
Quelle stratégie fonctionne le mieux sur cette paire ?
USD/CAD responds well to several strategies due to its dual nature of trending and range-bound behaviour. Breakout strategies are effective when the price decisively moves past key support or resistance levels following major news events. During periods of consolidation, technical rebound strategies, buying at support and selling at resistance, can be very effective. News-based trading around oil inventory reports and central bank announcements is also a popular approach, often using indicators like moving averages to confirm trend direction and RSI to spot reversals.
Quelle est la tendance actuelle de USD/CAD ?
The current trend for USD/CAD is largely neutral and consolidative, as the pair trades within a defined range. It is currently finding significant resistance near the 1.3685-1.3750 area, while key support holds around the 1.3550 level. This sideways movement reflects the market's uncertainty, caught between the influence of a strong U.S. dollar, supported by a favourable interest rate differential, and a Canadian dollar that is highly sensitive to fluctuating oil prices and Bank of Canada policy decisions.
Est-ce le bon moment pour acheter USD/CAD ?
Deciding whether to buy USD/CAD requires a nuanced approach, as conflicting signals create uncertainty. A bullish scenario would depend on a sustained break above the key resistance zone of 1.3750, potentially triggered by falling oil prices or hawkish U.S. economic data. Conversely, a rejection at this level or a drop below the 1.3550 support could signal further weakness. Investors should consider their own risk tolerance and wait for a clear catalyst before committing, as the pair is currently in a state of equilibrium.
Peut-on trader USD/CAD avec un petit capital ?
Yes, USD/CAD is one of the most suitable pairs for traders with smaller capital. As a major currency pair, it boasts extremely high liquidity, which translates into very tight spreads and lower transaction costs. Its volatility is generally more moderate than that of exotic pairs, making it easier to manage risk. The availability of leverage allows traders to control larger positions, but it is crucial to use strict risk management, such as small trade sizes and stop-losses, to protect your capital.
Quels sont les meilleurs horaires pour trader USD/CAD ?
The best time to trade USD/CAD is during the overlap of the London and New York trading sessions, typically between 8:00 AM and 12:00 PM EST. This is when trading volume and liquidity are at their peak, leading to tighter spreads and more significant price movements. Volatility is also highest on days with major economic announcements from either the U.S. or Canada, such as employment reports (NFP), inflation data (CPI), or central bank interest rate decisions.
Quelle stratégie fonctionne le mieux sur cette paire ?
USD/CAD responds well to several strategies due to its dual nature of trending and range-bound behaviour. Breakout strategies are effective when the price decisively moves past key support or resistance levels following major news events. During periods of consolidation, technical rebound strategies, buying at support and selling at resistance, can be very effective. News-based trading around oil inventory reports and central bank announcements is also a popular approach, often using indicators like moving averages to confirm trend direction and RSI to spot reversals.
