USD/CAD Price Forecast: Bearish Indicators Keep Downward Path Tilted

USD/CAD extended its weakness on Tuesday, trading around 1.3835. Despite cautious sentiment from the latest tit-for-tat tariff measures between the US and Canada, overall US dollar softness provided support for the Canadian dollar, pushing the pair slightly lower during the session.

**Dense Bearish Signals on Technical Charts**

Technical indicators show downward pressure is building. According to market analysis, the pair's price action remains capped by the nine-day exponential moving average (EMA), with the moving average sloping downward overall, indicating the short-term downtrend is intact. Additionally, momentum oscillators such as the relative strength index (RSI) are showing bearish alignment across intraday, daily, and weekly timeframes, further reinforcing the bearish setup. The price is currently testing the upper boundary of a rising descending wedge near the 1.3800 level; a decisive break below this support zone could open deeper downside space.

**Institutional Views Lean Bearish**

Analysts at Scotiabank noted that the Canadian dollar's recent steady gains keep the technical outlook for USD/CAD bearish. The institution believes the pair's sustained weakness below the retracement support level of 1.3817, combined with multi-timeframe bearish signals, suggests sellers remain in control. However, some views also noted that strong US employment data supported expectations of the Federal Reserve maintaining a tighter policy stance, which had briefly pushed the pair toward the 1.40 level, but current charts show this upside momentum has clearly faded, with bears regaining dominance.

**Tariff News Impact Limited**

Traders are digesting the latest round of tariff exchanges between the US and Canada. While trade tensions typically have the potential to disrupt exchange rates, market reaction has been relatively muted so far, with USD/CAD driven more by technical factors and overall US dollar weakness. Unless new bearish catalysts emerge, the pair may continue to consolidate with a weak bias within the current range.