USD/CAD stalls near 1.3850 as Fed controversy fuels further weakness

Source Fxstreet
  • USD/CAD trades sideways near 1.3850 after dipping to a six-month low around 1.3800
  • Trump’s attacks on Fed independence and Powell weigh on USD sentiment
  • Technical structure stays bearish, resistance seen near 1.3805 and 1.3935

The USD/CAD pair is treading water near the 1.3850 zone on Tuesday, struggling to extend its rebound after printing a fresh six-month low closer to the 1.3800 handle. The broader US Dollar remains on the defensive following two weeks of heavy losses, pressured by political risks and speculation about Federal Reserve leadership changes. President Trump’s criticism of Jerome Powell and suggestions of a possible dismissal have intensified concerns over the Fed’s independence, further dampening confidence in the Greenback.

The US Dollar Index (DXY) staged a modest bounce toward the 98.50 area after touching a three-year low at 98.00, but overall sentiment remains fragile. Investors are bracing for deeper losses amid persistent tensions around US-China trade, Powell’s autonomy, and growing doubts about the USD’s reserve status. Meanwhile, the Canadian Dollar holds steady, supported by expectations that the Bank of Canada will maintain a neutral monetary policy stance.

From a technical perspective, USD/CAD maintains a bearish bias. The pair is currently trading around 1.3800, within a narrow range of 1.3781–1.3852. The Relative Strength Index (RSI) is holding near 31, suggesting neutral momentum, while the Moving Average Convergence Divergence (MACD) and Momentum indicators are both flashing sell signals. Major moving averages, including the 20-day (1.4103), 100-day (1.4278), and 200-day (1.4006) Simple Moving Averages, all slope downward, confirming a bearish trend. Additional resistance is noted at 1.3805, 1.3934, and 1.3938.

Unless the political dust settles or incoming US data shifts sentiment, USD/CAD is likely to remain capped below the 1.3930–1.3940 zone, with risk skewed toward a further dip beneath 1.3800.


USD/CAD daily chart


Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, 2024
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
AUD/USD: Current price action is likely the early stages of a recovery – UOB GroupAustralian Dollar (AUD) is likely to trade in a sideways range between 0.6220 and 0.6290. In the longer run, current price action is likely the early stages of a recovery phase that could potentially reach 0.6350, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Author  FXStreet
Jan 22, Wed
Australian Dollar (AUD) is likely to trade in a sideways range between 0.6220 and 0.6290. In the longer run, current price action is likely the early stages of a recovery phase that could potentially reach 0.6350, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
placeholder
Five bullish Shiba Inu (SHIB) Price Predictions for April 2025SHIB price targets diverge as investors weigh Shibarium L3 upgrades, burn-rate surges, and altcoin market sentiment. Forecasts range from a conservative $0.000012 to a parabolic $0.00030.
Author  FXStreet
Apr 16, Wed
SHIB price targets diverge as investors weigh Shibarium L3 upgrades, burn-rate surges, and altcoin market sentiment. Forecasts range from a conservative $0.000012 to a parabolic $0.00030.
placeholder
Gold price slides back closer to $3,300 amid positive risk tone, modest USD uptickGold price (XAU/USD) trades with a negative bias for the second consecutive day, though it lacks bearish conviction and holds above the $3,300 mark during the Asian session on Wednesday.
Author  FXStreet
21 hours ago
Gold price (XAU/USD) trades with a negative bias for the second consecutive day, though it lacks bearish conviction and holds above the $3,300 mark during the Asian session on Wednesday.
placeholder
Gold extends consolidation ahead of key US data releasesGold price (XAU/USD) continues to trade in a narrow range around $3,300 on Wednesday as traders await key US economic data, which could become the catalyst for an imminent breakout. 
Author  FXStreet
18 hours ago
Gold price (XAU/USD) continues to trade in a narrow range around $3,300 on Wednesday as traders await key US economic data, which could become the catalyst for an imminent breakout. 
Related Instrument
goTop
quote