USD/CAD Price Forecast: Consolidates below 1.4250/April 2025 highs as traders await US PCE
The USD/CAD pair enters a bullish consolidation phase during the Asian session on Thursday and currently trades around the 1.4230-1.4225 region, just below its highest level since April 2025 touched the previous day. Traders now seem hesitant and opt to move to the sidelines ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index.
In the meantime, traders scaled back their bets on Federal Reserve (Fed) interest rate increases amid easing inflationary concerns in the face of the recent downfall in Crude Oil prices to the pre-Iran levels. This triggers a modest US Dollar (USD) corrective pullback from the highest level since May 2025 and acts as a headwind for the USD/CAD pair. However, bearish Crude Oil prices continue to undermine the commodity-linked Loonie and limit the downside for the currency pair.
From a technical perspective, the recent breakout through the November 2025 highs, near the 1.4130 area, was seen as a fresh trigger for bulls and suggests that the momentum remains aggressively positive. Moreover, the Moving Average Convergence Divergence (MACD) indicator holds in positive territory with a relatively firm reading, reinforcing the bullish bias. However, the Relative Strength Index (RSI) sits in overbought territory near 88, hinting that upside pressure is stretched.
Hence, it will be prudent to wait for some near-term consolidation or a modest corrective decline before traders start positioning for an extension of the recent well-established uptrend. Nevertheless, the path of least resistance for the USD/CAD pair remains to the upside until momentum eases from overbought readings or a clear lower high forms. This suggests that fresh buying could emerge near the 1.4200 mark, which should limit the downside near the 1.4130 resistance breakpoint.
(The technical analysis of this story was written with the help of an AI tool.)
USD/CAD daily chart
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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