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17.03.202512:05 Forex Analysis & Reviews: USD/CAD: The Pair Starts the New Week with Caution

Exchange Rates 17.03.2025 analysis

The USD/CAD pair begins the new week with caution, fluctuating within a narrow range above 1.4350 and remaining above the 50-day SMA. However, fundamental factors suggest potential downside risks.

Exchange Rates 17.03.2025 analysis

Positive developments in U.S.-Canada trade negotiations, along with the recent rise in crude oil prices, support the commodity-dependent Canadian dollar, exerting downward pressure on the pair. Oil prices have reached a two-week high amid escalating tensions in the Red Sea, as the U.S. vowed to continue strikes against Yemen's Houthis until their attacks cease. This situation also impacts the market. Additionally, bearish sentiment surrounding the U.S. dollar creates negative prospects for USD/CAD.

Exchange Rates 17.03.2025 analysis

The U.S. Dollar Index remains near multi-month lows due to concerns about the potential negative impact of Trump's tariffs on the economy. Weaker inflation data and signs of labor market cooling may lead to interest rate cuts by the Federal Reserve this year, further restraining dollar bulls.

Exchange Rates 17.03.2025 analysis

Traders should closely monitor the release of U.S. economic data, including retail sales figures and the Empire State Manufacturing Index, which could provide some short-term momentum to the pair during the North American session. However, the key event of the week remains the FOMC monetary policy meeting on Wednesday, which will have a significant impact on the U.S. dollar and set the direction for USD/CAD.

Technical Outlook:

From a technical perspective, bears should wait for confirmation of weakness below the 1.4350 support level, where the 50-day SMA is positioned, before initiating new sell positions. Furthermore, daily chart oscillators have yet to shift into negative territory, indicating that further confirmation is required for a clear bearish signal.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2025
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