USD/CAD price slips as risk sentiment improves and oil stabilizes near multi-year lows

The U.S. dollar edged lower against the Canadian dollar on Thursday, with USD/CAD slipping to $1.41 after failing to hold above the $1.41 mark during the Asian session. The pair continues to feel the pressure from improving risk sentiment and a weakening greenback, as markets react to U.S. President Donald Trump’s decision to temporarily suspend reciprocal tariffs—excluding the elevated 125% duty on Chinese imports.
This development, combined with growing expectations of multiple Federal Reserve rate cuts in 2025, has kept the dollar subdued across major currency pairs. Traders are now looking ahead to Friday’s U.S. inflation data, which could provide fresh cues on the pace and magnitude of Fed easing. The dovish outlook has dampened demand for the dollar and allowed commodity-linked currencies like the Canadian dollar to benefit.
USD/CAD price dynamics (October 2024 - April 2025) Source: TradingView.
Oil prices and Canadian resilience limit USD/CAD upside
Although crude oil prices remain under pressure, bouncing modestly from multi-year lows after dropping below $56, the Canadian dollar found support from broader economic resilience and recent policy responses. Notably, Canada’s swift imposition of a 25% tariff on non-USMCA compliant vehicles beginning April 9 has reinforced confidence in its trade strategy and helped shield vulnerable export sectors. Moreover, recent data has reflected steady domestic fundamentals, even as political uncertainty looms ahead of the April 28 snap election.
From a technical standpoint, USD/CAD has repeatedly failed to break above its 100-day Simple Moving Average, reinforcing a bearish trend. Analysts are now eyeing the 200-day SMA near 1.4000 as a key support level. A decisive break below that level could open the door for an extended move lower, particularly if Friday’s CPI data supports further Fed rate cuts.Resistance and support levels ahead
Upside for USD/CAD remains capped near the $1.4175–1.42 zone, with sellers expected to emerge on short-covering rallies. A sustained move above 1.4300 would shift the near-term bias toward the bulls, though broader macro forces remain in favor of Canadian strength.
In earlier reports, we noted that USD/CAD faced downside risks from crude recovery and Fed dovishness. With oil steadying and trade optimism improving, the pair appears poised to test lower technical support, aligning with our previous forecasts.