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June 27, 2025

Currencies

USDCAD Outlook: Loonie Leverage as Greenback Falters

1. Summary

  • Recent Action: USDCAD fell sharply to 1.3625–1.3640, breaching its April–May uptrend.
  • Support: Strong near 1.3600; break below eyes 1.3550.
  • Resistance: Capped near 1.3750–1.3770.
  • Bias: Bearish short-term structure, especially under 1.3670.

2. Fundamental Factors

  • USD Weakness:
    • U.S. GDP contracted (-0.5%) in Q1.
    • Trump's Powell comments shake Fed credibility.
    • DXY is weaker across the board (~10% YTD).
  • Canada's Mixed Signals:
    • Retail sales plunged -1.1% (May) → fuels BoC rate cut speculation.
    • CPI is at 1.7%, and core inflation remains sticky, tempering expectations for immediate easing.

3. Key Takeaway for Traders

USDCAD is stuck in a tight 1.3600–1.3750 range, with downside pressure dominating U.S. dollar softness and weakening Canadian data.

  • Bearish Scenario: A decisive break below 1.3600 opens room to 1.3550 and even 1.3480.
  • Bullish Case: Only a strong USD bounce or hawkish Fed tone reclaims 1.3750+.

Watch for:

  • Canadian GDP (next week),
  • U.S. PCE inflation,
  • BoC commentary for July rate clues.

USDCAD – H4 Timeframe

USDCADH4_(8).png

The above chart shows a bullish trade setup for USDCAD on the 4-hour timeframe chart. Price initially broke above the previous high of the downtrend (above the black trendline, too) and made a strong upward move, retracing back towards the key regions of the Fibonacci retracement tool—76% to 88%. I expect price to bounce from the demand zone near the 88% level and continue higher toward the previous high, around 1.3800.

Direction: Bullish

Target- 1.38046

Invalidation- 1.35276

CONCLUSION

You can access more trade ideas and prompt market updates on the telegram channel.

Trading foreign currencies on margin involves significant risks and may not be suitable for everyone, as high leverage can increase both potential gains and losses. Before entering the foreign exchange market, it is essential to evaluate your investment goals, personal experience, and risk tolerance.

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Adetola-Freeman Ogunkunle

Author: Adetola-Freeman Ogunkunle

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