Created
: 2025.05.09
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
USD/CAD Price Forecast: Strengthens after Falling wedge breakout
World FX news
Breaking news
USD/CAD Price Forecast: Strengthens after Falling wedge breakout
New
2025.05.09 19:58
2025.05.09 19:58
2025.05.09 19:58
- USD/CAD clings to gains near 1.3920 as the US Dollar performs strongly.
- The Fed has indicated that there is no rush for interest rate cuts.
- BoC warned that Trump's tariffs have posed financial stability risks.
The USD/CAD pair holds onto gains made on Thursday around 1.3920 during European trading hours on Friday. The Loonie pair performs strongly as the US Dollar (USD) strengthens on multiple tailwinds.
At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, retreats from almost a month high of 100.85 to near 100.40, but is up more than 1% in the last two trading days.
The US Dollar strengthened as the Federal Reserve (Fed) signaled in the monetary policy announcement on Wednesday that there is no rush for interest rate cuts, given elevated uncertainty due to new economic policies announced by the United States (US) President Donald Trump. Another reason behind firmness in the US Dollar is the announcement of the US-United Kingdom (UK) trade deal.
Meanwhile, investors await trade discussions between the US and China, which are confirmed in Switzerland on Saturday.
In the Canadian region, the annual Financial Stability Report from the Bank of Canada (BoC) showed on Thursday that the Trump-led trade war poses "risks to financial stability". The report also showed concerns over "household and business credit defaults".
USD/CAD gains sharply after a breakout of the Falling Wedge chart pattern formed on a four-hour timeframe. Historically, a falling wedge breakout sets the stage for a bullish reversal. The pair extends its upside above the 20-period Exponential Moving Average (EMA), which is around 1.3860, indicating that the near-term trend has turned bullish.
The 14-period Relative Strength Index (RSI) rises sharply to near 66.00, suggesting a strong bullish momentum.
More upside towards the April 9 low of 1.4075, followed by the April 8 low of 1.4272 would appear if the pair breaks extend its recovery above the psychological level of 1.4000
In an alternate scenario, a downside move below the psychological support of 1.3500 and the September 24 low of 1.3430 looks likely if the pair breaks below the round level of 1.3600.
USD/CAD four-hour chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world's reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed's weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Last updated
: 2025.05.09
Related articles
Canadian Dollar gives back gains despite upbeat jobs data
2025.06.07 06:04Mexican Peso climbs to eight-month highs against the US Dollar despite upbeat US jobs data
2025.06.07 04:39USD/JPY Price Forecast: Soars to weekly high, near 145.00 on hot US jobs report
2025.06.07 04:37EUR/USD declines on hot US NFP report, dents ECB-driven Euro rally
2025.06.07 03:56Dow Jones Industrial Average tests fresh highs on NFP beat despite downside revisions
2025.06.07 03:03Fed's Harker: Still possible the Fed can cut rates later this year
2025.06.07 01:57
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
Canadian Dollar gives back gains despite upbeat jobs data
The Canadian Dollar (CAD) saw firm gains in employment figures on Friday, with an overall net increase in Canadian employment thumping median market forecasts for a contraction.
New
2025.06.07 06:04Mexican Peso climbs to eight-month highs against the US Dollar despite upbeat US jobs data
The Mexican Peso (MXN) is experiencing its third consecutive day of gains against the US Dollar (USD) on Friday, pushing the USD/MXN exchange rate to its lowest level in eight months.
New
2025.06.07 04:39USD/JPY Price Forecast: Soars to weekly high, near 145.00 on hot US jobs report
USD/JPY extended its uptrend for two consecutive days, with the major currency pair reaching a new weekly high of 145.09, driven by solid US economic data on Friday.
New
2025.06.07 04:37EUR/USD declines on hot US NFP report, dents ECB-driven Euro rally
EUR/USD trip down extends its losses on Friday after hitting a six-week high near 1.1500 as Nonfarm Payroll figures in the United States (US) came in stronger than expected despite cooling off.
New
2025.06.07 03:56Dow Jones Industrial Average tests fresh highs on NFP beat despite downside revisions
The Dow Jones Industrial Average (DJIA) briefly tested fresh 13-week peaks on Friday, with equities taking a step higher after Nonfarm Payrolls (NFP) jobs data came in stronger than expected.
New
2025.06.07 03:03Silver Price Forecast: XAG/USD hits a 13-year high on increased demand for the industrial metal
Silver (XAG/USD) is experiencing another day of positive gains, which has pushed prices to $36.00, its highest level since February 2012, providing a firm barrier of resistance.
New
2025.06.07 02:45Gold price falls on strong US Nonfarm Payrolls yet is poised for weekly advance
Gold price extended its losses for the second consecutive day on Friday but is poised to finish the week with gains of over 1.30% after the latest Nonfarm Payrolls report in the United States (US) was solid, pressuring traders to trim their bets that the Federal Reserve (Fed) will ease monetary poli
2025.06.07 02:15Fed's Harker: Still possible the Fed can cut rates later this year
Federal Reserve (Fed) Bank of Philadelphia President Patrick Harker is embarking on a farewell tour.
2025.06.07 01:57AUD/USD falls as US Dollar bulls return following NFP data
The Australian Dollar (AUD) is weakening against the US Dollar (USD) following Friday's Nonfarm Payrolls (NFP) pushed back expectations of a near-term interest rate cut from the Federal Reserve (Fed).
2025.06.07 00:52GBP/USD slips as strong US jobs data cools Fed rate cut bets
GBP/USD tumbled during the North American session, down over 0.30% after the latest jobs report in the United States (US) maintained the status quo, with the economy remaining strong. The pair traded at 1.3526 after hitting a daily high of 1.3586.
2025.06.07 00:21Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
