USDCAD Weekly Analysis 03/01/2025

USDCAD Weekly Fundamental analysis

1. Overview of Momentum and Market Structure

• Current Momentum: Bullish

• Previous Week’s Performance: Bullish

• Range: 1.4150 – 1.4470

• Expectations: Price is expected to move higher, targeting liquidity zones and fair value gaps (FVGs).

Trading Plan

For Short Positions

Strategy:

• Look for selling opportunities at strong resistance levels for a potential pullback or reversal:

  • 1.4593 (SR Level - Major Resistance & Institutional Sell Area)

  • 1.4724 (H4 FVG - Extended Target & Possible Long-Term Reversal Zone)

Sell Targets:

• 1.4470 (Key Liquidity Pool - First Short-Term Target for Shorts)

• 1.4399 (H4 Liquidity - Strong Demand Zone & Possible Retest Level)

• 1.4355 (H4 FVG - Potential Support for Buyers to Re-enter)

Bullish Bias

Strategy:
Look for long positions at strong liquidity zones and fair value gaps:

• Buy Levels:

  • 1.4297 (H4 Liquidity - Key Demand & Institutional Support Zone)

  • 1.4271 (H4 FVG - Fair Value Gap for Bullish Continuation)

  • 1.4244 (Weekly FVG - Institutional Order Flow Zone)

  • 1.4214 (Weekly OB - Major Order Block & Key Demand Area)

Primary Targets:

• 1.4470 (Extreme Liquidity - First Take-Profit Zone for Longs)

• 1.4501 (H4 Liquidity - Strong Resistance & Potential Profit Zone)

• 1.4593 (SR Level - Key Resistance & Institutional Sell Zone)

Summary

• Bullish sentiment with buy setups at 1.4297, 1.4271, 1.4244, and 1.4214, targeting 1.4470, 1.4501, and 1.4593.

• Short opportunities at 1.4593 and 1.4724, targeting 1.4470, 1.4399, and 1.4355.

• Monitor price action for liquidity grabs, order flow confirmation, and possible retracements before entering positions.

Technical analysis

USD/CAD edges lower after the US PCE inflation data and Canada’s stronger-than-expected Q4 GDP. The US core PCE slowed to 2.6% YoY as expected, offering some relief to the Fed, while Canadian GDP rose 2.6%, surpassing forecasts. However, month-over-month growth in December remained tepid at 0.2%.

Despite this, CAD remains under pressure amid trade concerns, as US President Donald Trump confirmed 25% tariffs on Canada and Mexico starting March 4. With the Fed expected to maintain a restrictive stance, USD/CAD remains supported around 1.4430, with volatility likely to persist.