The Canadian Dollar is doing well and is gaining strength alongside the Australian and New Zealand Dollars. The usual market patterns have changed, as the Canadian Dollar now shows a negative relationship with US stocks. There have been discussions about a possible trade agreement in the next 30 days, which could further support the Canadian Dollar. In the short term, the USD/CAD trend appears bearish, suggesting the US Dollar is likely to decline.

Technical Analysis Insights

Technical analysis shows resistance at 1.3650/60 and support at 1.3540/50. A key target for the Canadian Dollar is at 1.3400/05. These market signals carry risks and do not serve as trading recommendations. It’s important to do your own research before making financial decisions. Trading in open markets carries risks, including the possibility of losing your entire investment. The strength of the Canadian Dollar stands out, especially as it rises with other commodity-linked currencies like the Australian and New Zealand Dollars. However, what’s even more striking is the change in a familiar trend—traditionally, the Canadian Dollar moves in sync with US stocks, but now it has begun to move independently. As US stocks increase, the Canadian Dollar is gaining traction on its own. There are ongoing discussions about a possible trade agreement that could be finalized within the next month. This timing is significant, especially given the current upward movement of the Canadian Dollar. If a deal is completed, it could boost the currency even further. Besides politics and international relations, the notable downtrend in the USD/CAD pair aligns with current market sentiment and technical factors.

Currency Behaviour and Risk Management

Our analysis of USD/CAD shows persistent resistance around 1.3650–1.3660. This level has been tested several times and has proven strong, creating a solid ceiling. Support appears to be firmly established around 1.3540–1.3550, proving stable during weaker trading sessions. Looking ahead, traders seem to target a movement towards 1.3400–1.3405. From our viewpoint, these resistance and support levels frame the price behavior in the near term, helping to fine-tune short-term positioning and timing for entries. Given these ranges and overall trends, it’s wise to pay attention during attempts to retest key resistance levels or break through support. For those trading based on technical levels, observe the volume and strength of price reactions within this range, rather than assuming trends will continue. The recent shift away from correlation with US equities and the potential trade talks suggest that external factors may be becoming more influential. Price movements provide reliable short-term insights, and following these patterns helps maintain objectivity amid ongoing news cycles. However, remember that testing an upside target, like 1.3400, doesn’t ensure a breakthrough; unexpected liquidity changes can distort usual reactions. Market participants should remain aware of the bearish trend. While downward pressure is clear, oversold conditions can limit entry points unless balanced with volume dynamics, particularly during the London–New York overlap. Risk exists not only in uncertainties but also in existing assumptions about known setups. Even high-probability trades can result in significant surprises. Timing should focus on how price reacts at key levels rather than trying to predict outcomes. Be cautious of overexposure during short-term moves, especially when confidence leads to convenience. Maintaining caution and precise execution remains essential in changing market conditions. Create your live VT Markets account and start trading now.

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