- USD/CAD is testing a critical confluence level at 1.3728, a key resistance area.
- The pair's rise is primarily driven by a resurgent US Dollar and stronger-than-expected US economic data.
- Key catalysts to watch are the upcoming Canadian Q4 GDP and US PPI data on Friday, as well as Oil price movements.
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The loonie has continued to lose ground against the greenback today reaching a daily high around the 1.3725 handle.
One of the key drivers of late has been a resurgent greenback which has overshadowed the rise in Oil prices. Similar to what we saw last year with the implementation of the liberation day tariffs where the US dollar weakened as a result, the US Supreme Court decision has given the US dollar a boost.
Stronger-than-expected US data, including a rise in Consumer Confidence (91.2 vs. 87.1 forecast) and an uptick in the ADP Employment Change four-week average, also bolstered the greenback.
Technical Analysis - USD/CAD
Back to the technicals though and USD/CAD has made its way back to a key confluence level at 1.3728.
This makes the upcoming sessions key as it could see USD/CAD extend its rally higher or we could be starting a new leg to the downside.
The 1.3728 handle has been a key area of support in 2025 before serving as a key resistance area since the start of 2026.
A break of this level does face further areas of resistance above with the 100 and 200-day MAs resting at 1.3859 and 1.3810 respectively.
If the greenback runs out of steam and we do get a pullback, immediate support rests at 1.3650 before the 1.3500 handle comes into focus.
USD/CAD Daily Chart, February 24, 2025
Source: TradingView.com (click to enlarge)
What catalysts could facilitate the move
The market was in a "wait-and-see" mode regarding domestic Canadian data. Investors were looking ahead to the Q4 annualized GDP report due that Friday, which was expected to provide the next major catalyst for the Canadian Dollar's direction.
From the US we will get PPI data on Friday which could also stoke volatility.
Beyond the data, Oil prices may still have a role to play. If the US-Iran situation heads toward conflict, Oil prices may surge. This in turn could lend the Canadian dollar some support and scupper any attempted move higher.
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