USDCAD Weekly Analysis 02/22/2025

Fundamental analysis

1. Overview of Momentum and Market Structure

• Current Momentum: Bullish

• Previous Week’s Performance: Bullish

• Range: 1.4150 – 1.4244

• Expectations: Price is expected to push towards key liquidity zones before potential reversals.

Trading Plan

For Short Positions

Strategy:
Look for sell opportunities at strong resistance levels:

• Sell Levels:

  • 1.4269 (Weekly FVG - Major Institutional Resistance & Sell Zone)

  • 1.4302 (H4 Liquidity - Profit-Taking & Potential Reversal Zone)

  • 1.4341 (H4 Liquidity - Overextended Level & Rejection Area)

Sell Targets:

• 1.4199 (First Downside Target & H4 FVG Rebalance Zone)

• 1.4165 (H4 Liquidity - Strong Support for Potential Bounce)

• 1.4244 (Extreme Liquidity - Key Market Structure Level)

Bullish Bias

Strategy:
Look for buy opportunities from key demand and liquidity zones:

• 1.4199 (H4 FVG - Institutional Demand & Support Zone)

• 1.4165 (H4 Liquidity - Key Buy Zone & Reversal Area)

Primary Targets:

• 1.4244 (Extreme Liquidity - Major Resistance & Liquidity Pool)

• 1.4269 (Weekly FVG - Strong Supply Zone & Rejection Area)

• 1.4302 (H4 Liquidity - Institutional Sell Zone & Profit-Taking Area)

• 1.4341 (H4 Liquidity - Extended Target & Overbought Zone)

Summary

• Bullish bias remains valid above 1.4165, targeting 1.4244, 1.4269, 1.4302, and 1.4341.

• A clean break above 1.4244 (Extreme Liquidity) may accelerate bullish momentum.

• Short setups become valid near 1.4269, 1.4302, and 1.4341 for potential reversals.

• Monitor price action at FVGs and liquidity zones for confirmation.

Technical analysis

USD/CAD Holds Steady as BoC Highlights Trade War Risks

USD/CAD remains firm after Bank of Canada (BoC) Governor Tiff Macklem warned of severe economic consequences if the U.S. imposes tariffs on Canadian exports. Macklem emphasized that a prolonged trade conflict could lower exports, reduce investment, and push inflation temporarily above 2%. While the BoC may lower rates to support demand, its ability to respond is limited by inflation risks. Markets continue to price in rate cuts for mid-2025, keeping the Canadian dollar under pressure amid growing policy divergence with the Federal Reserve.