• The USD/CAD weekly forecast shows tariffs threatening growth in the US and Canada.
• Trump’s new tariffs worsened fears about a US recession.
• Employment figures from Canada revealed a weak labor market.

The USD/CAD weekly forecast shows tariffs threatening growth in the US and Canada, which could keep the pair in consolidation.
 

Ups and downs of USD/CAD 

The USD/CAD pair had a bearish week but closed well above its lows, showing bears and bulls were almost equally matched. The decline came after Trump’s new tariffs worsened fears about a US recession. The US president put a 10% tariff on all imports, with some countries like China suffering higher levies. As a result, the dollar collapsed.

However, it rebounded after Powell’s speech, which indicated more caution due to uncertainty regarding inflation and growth. Meanwhile, employment figures from Canada revealed a weak labor market, with poor job growth and rising unemployment. On the other hand, the US witnessed a surge in job growth and higher unemployment.
 

Next week’s key events for USD/CAD

Next week, traders will watch US reports on consumer and wholesale inflation. At the same time, the FOMC meeting minutes might contain clues on future Fed moves. 

The last consumer inflation report exceeded estimates, raising fears that the downtrend had paused. Another positive report will confirm the recent surge in inflation expectations and the impact of Trump’s tariffs. Such an outcome would also lower expectations for Fed rate cuts. However, market participants also worry about a likely recession, forcing the Fed to act. Therefore, the reaction to economic data might only be brief.
 

USD/CAD weekly technical forecast: Bears attempt a takeover below the 1.4175 support

(Click on image to enlarge)

USD/CAD daily chart

On the technical side, the USD/CAD price has punctured the 1.4175 support level and made a lower low. However, the price rebounded and closed above the level. Still, the bearish bias remains intact, with the price below the 22-SMA and the RSI under 50. 

USD/CAD has primarily remained in a tight consolidation between the 1.4175 support and the 1.4500 resistance levels. In this range, bears and bulls have battled for control. The price once made a false bullish breakout before falling back into the range area. 

This time, bears have breached the range support. If they are ready to take charge, the price will continue lower next week. This would allow USD/CAD to retest the 1.3802 support level. 

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