The USD/CAD currency pair has become a key focal point in the broader trend of U.S. Dollar weakness. This week, the pair resumed its slide after failing to maintain levels above the 1.4000 psychological barrier. That level had long been eyed as critical resistance, and the inability of bulls to drive and sustain a breakout higher has opened the door for sellers to take control once more.
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Resistance at 1.4000 Confirmed – Selling Pressure Takes Hold
The pair topped out at 1.4000 last week without recording a single daily close above it. That price ceiling has now been reinforced by a string of lower highs, beginning with a swing high on Tuesday, May 13. Since then, each rally attempt has been met with renewed selling, pushing USD/CAD into a sustained downtrend this week. The move has already resulted in a more than 200-pip drop from the recent high.
Zooming Out: A Bearish USD Trend Still Dominates
The Canadian Dollar continues to benefit from broader U.S. Dollar weakness that has defined much of 2025 so far. This marks a notable shift from the strong performance of the Greenback seen at the start of the year. Increasing concerns around a potential carry trade unwind in USD/JPY could add fuel to the Dollar’s downturn.
Why USD/CAD Remains a Key Proxy for USD Weakness
Despite earlier attempts at a breakout, the longer-term range in USD/CAD remains intact. The spike above 1.4500 was short-lived, and the return below 1.4000 has since held with conviction. For traders positioning around the idea of further USD softness, USD/CAD continues to offer a clean technical framework with well-defined levels.
Weekly Chart Takeaways
- Bulls failed to sustain above 1.4500
- 1.4000 acts as firm resistance
- Range continuation likely to dominate unless structural change emerges
Short-Term Outlook: Breakdown in Motion
As of now, USD/CAD is nearing its 2025 lows around the 1.3750 mark. This level could act as near-term support, but momentum remains with sellers.
Key Technical Levels to Watch
For those anticipating a pullback or retracement before the next leg lower, several resistance zones are now in play:
Potential Pullback Resistance Levels
- 1.3781 – aggressive resistance from the last minor swing
- 1.3813 – previously short-term support, now turned resistance
- 1.3890–1.3905 – broader resistance zone that could cap deeper rallies
Traders may look to these levels as potential entry points for bearish continuation trades, especially if price action stalls or rejects within those zones.
Canadian Dollar Gains as Benchmark Bond Yield Rises
Canadian Dollar Declines as Benchmark Bond Yield Dips
Good News: Canadian Dollar Soars to 5-Month High Amid Rate Pause Hopes and Global Investment Shift
Canadian Dollar Slips Lower Against the U.S. Dollar
Canadian Dollar Outlook USD/CAD Trends Amid Trump, Trudeau, Tiff, and Tariffs
Canadian Dollar Strengthens as CPI Data Reduces Expectations for Large Rate Cuts
Final Thoughts: USD/CAD Breakdown Aligned with Broader Dollar Weakness
The U.S. Dollar’s recent losses have been sharp and broadly distributed across major pairs. USD/CAD continues to serve as one of the more technically attractive venues to trade that weakness, particularly given the clear rejections at major psychological levels like 1.4000 and the presence of defined support/resistance structures.
If bearish momentum holds and macro conditions don’t shift dramatically, the current trend could carry USD/CAD even lower through mid-year 2025.