USD/CAD Price Forecast: Recovers To Near 1.4200

By Sagar Dua of FXStreet

Friday, February 21, 2025 7:05 AM EDT

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The USD/CAD pair gains to near the key resistance of 1.4200 in European trading hours on Friday. The Loonie pair moves higher after recovering from the three-day low of 1.4166, which it posted on Thursday. The asset rebounds due to a recovery move in the US Dollar (USD), with the US Dollar Index (DXY), bouncing back to near 106.65 from the Year-to-date (YTD) low of 106.30 recorded on Thursday.

The recovery move in the Greenback appears to be short-lived as its risk premium has diminished, with investors start digesting United States (US) President Donald Trump’s tariff agenda and optimism over Russia-Ukraine peace.

On the monetary policy, Federal Reserve (Fed) officials remain confident that interest rates should remain in the current range as they lack details of Trump’s tariff and taxations policies.

Though investors have underpinned the US Dollar against the Canadian Dollar (CAD) on Friday, it is outperforming other peers even though traders remain confident the Bank of Canada (BoC) will ease its monetary policy further.

Meanwhile, investors await the Canadian Retail Sales data for December and BoC Governor Tiff Macklem’s speech at an event at Mississauga, Ontario.

USD/CAD trades in a Descending Triangle chart pattern formed on an hourly timeframe. The downward-sloping border of the above-mentioned chart pattern is plotted from the February 9 high of 1.4380 and the flat border is placed from the February 14 low of 1.4151.

The 20-period Exponential Moving Average (EMA) overlaps the Loonie price, suggesting a sideways trend.

The 14-period Relative Strength Index (RSI) trades inside the 40.00-60.00 range, which indicates an indecisiveness among investors.

The pair has remained in a downtrend since the first trading day of February and could see more downside on a breakdown below the February 14 low of 1.4151 towards the December 9 low of 1.4094, followed by the December 6 low of 1.4020.

On the contrary, an upside move above the February 19 high of 1.4246 will open the door toward the round-level resistance of 1.4300 and the February 9 high of 1.4380.

USD/CAD hourly chart

(Click on image to enlarge)

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USD/CAD Declines To Near 1.4200 As US Dollar Underperforms Its Peers

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