The USDCAD rate soared to 1.4800 on Monday due to tariffs imposed by the US on goods from Canada and other countries over the weekend. Discover more in our analysis for 3 February 2025.
USDCAD forecast: key trading points
- The US imposed 25% tariffs on Canadian goods
- Current trend: a strong uptrend
- USDCAD forecast for 3 February 2025: 1.4700 and 1.4900
Fundamental analysis
The Canadian dollar plunged sharply on Monday after US President Donald Trump introduced new tariffs on major trading partners last weekend. The US imposed 25% tariffs on goods from Mexico and Canada and 10% tariffs on imports from China.
In response, Canada announced retaliatory tariffs, and Mexico signalled that it would consider introducing its own duties on US goods. China, in turn, said it intended to file a WTO case. Investors reacted negatively to growing trade tensions, with the US dollar rising and global stock index futures declining.
USDCAD technical analysis
On the H4 chart, the USDCAD pair continues its upward momentum. Today, the pair opened the day with an upward gap following the introduction of US trade tariffs against Canada. The Alligator indicator is below the price chart and is moving upwards, confirming a bullish trend.
The short-term USDCAD price forecast suggests that the pair may continue its ascent towards the 1.4900-1.5000 area if bulls retain the initiative. However, a downward correction is possible if bears gain control and bring prices back into the area below 1.4600.
Summary
The USDCAD pair is rising rapidly amid trade battles between the US and Canada. The trend is upward, with the price likely to resume its upward movement after a correction.
Source: Roboforex
