The U.S. dollar strengthened against the Canadian dollar on Friday, with the USD/CAD pair rising as trade policy uncertainty and potential tariff measures weighed on the loonie.
According to technical analysis from Investing.com, the Canadian dollar’s decline could extend further if key support levels fail to hold. The analysis suggests the pair could target higher levels if recent lows are breached, with resistance seen at 1.3850 and support at 1.3650. The loonie has already lost ground this week, reflecting broader concerns over trade tensions that could disrupt Canada’s export-driven economy.
The technical outlook indicates that a break below the 1.3650 support level could accelerate losses, potentially pushing the pair toward 1.3900. Conversely, if the support holds, the analysis suggests a consolidation phase may emerge, with the pair trading within a narrower range. The current trend remains bearish for the Canadian dollar, driven by external trade policy risks rather than domestic fundamentals.
The analysis does not specify a timeline for these scenarios but emphasizes the sensitivity of the loonie to trade-related developments. The USD/CAD pair has been volatile in recent sessions, with traders closely monitoring geopolitical headlines for directional cues.
