USD/CAD Consolidates in a Narrow Range

In the latter half of April, USD/CAD volatility has eased, following sharp movements seen since February. Over the past week, the pair has stabilised within the 1.390–1.380 range, as traders evaluate what a fair value for the exchange rate might be amid shifting market dynamics:

• The US dollar has found some strength on optimism around potential easing in US-China trade tensions. However, conflicting signals persist — while Trump suggests talks are ongoing, Beijing has denied this.
• Oil prices — a major driver for the Canadian dollar — have rebounded by over 10% from April lows, lending support to the loonie.
• Recent economic data points to a cooling Canadian economy, with employment figures weakening and average wage growth slowing to 5.4%.
• Although Canada is set to hold parliamentary elections this weekend, the event has had little effect on the currency pair so far. US-Canada trade tariff concerns appear to be overshadowing political factors.

USD/CAD Technical Outlook

The pair continues to trade within a descending channel that began forming in March.

From a bearish viewpoint, resistance levels include:

• the channel’s median line,
• the psychological barrier at 1.400.

From a bullish standpoint:

• a rounding bottom pattern has developed near the 1.380 level,
• the channel’s lower boundary is acting as firm support.

Looking ahead, potential weekend developments — whether political or economic — could provide the momentum needed to break the current 1.390–1.380 consolidation range.

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