then 'Add to home screen'
then 'Add to home screen'
USD/CAD Forex Signal – April 22, 2025
Market Overview
The USD/CAD pair is showing signs of weakness near the 1.3710 level as of April 22, 2025, reflecting the growing strength of the Canadian Dollar backed by strong oil prices and solid macroeconomic data. The U.S. Dollar, on the other hand, is trading under pressure due to dovish expectations around the Federal Reserve and underwhelming economic performance.
Today’s forex signal aims to capitalize on the pair’s technical rejection from resistance zones and the fundamental pressure weighing on the greenback. With crude oil prices holding strong and market sentiment favoring risk assets, the Canadian Dollar is gaining notable traction.
Trade Setup Summary
- Currency Pair: USD/CAD
- Signal Type: Sell
- Entry Price: 1.3710
- Take Profit 1: 1.3610
- Take Profit 2: 1.3530
- Stop Loss: 1.3780
- Time Frame: 1–3 days (short-term swing)
Fundamental Analysis
Crude Oil and Its Influence on CAD
Canada, being one of the world’s largest oil exporters, enjoys a positive correlation between oil prices and the Canadian Dollar. WTI crude oil is currently trading near $88.50, supported by:
- Ongoing geopolitical tensions in oil-producing regions.
- OPEC+ adherence to supply cuts.
- Positive demand outlook from China and India.
These factors are giving the Canadian Dollar a strong tailwind, making it more attractive against weaker currencies like the USD.
Canadian Economic Data
Recent releases from Canada have shown strength:
- CPI (YoY) remains firm at 3.1%, reflecting inflation resilience.
- Retail Sales increased by 0.6%, beating expectations.
- The Ivey PMI remains above 55, suggesting ongoing economic expansion.
These data points reduce pressure on the BoC to cut rates, contrasting with U.S. central bank dovishness.
U.S. Dollar Under Pressure
- The Philadelphia Fed Manufacturing Index fell to -8.4, missing consensus.
- Jobless Claims rose to 248,000, up from 232,000 previously.
- Fed Funds Futures now price in a 57% chance of a rate cut by June 2025.
This reinforces bearish sentiment for USD as economic indicators fail to support further tightening.
Technical Analysis
Moving Averages
- The pair is below the 50-period SMA and approaching the 100-period SMA.
- A bearish crossover is visible on the 4H chart.
RSI
- RSI is at 46 and trending lower.
- This suggests increasing selling pressure without reaching oversold territory.
MACD
- MACD lines have crossed below the signal line.
- Histogram bars are increasing in the negative zone.
Fibonacci Levels
- Price rejected the 61.8% retracement of the previous downtrend at 1.3740.
- The 38.2% level near 1.3610 is the next target.
Price Structure
- Triple rejection at 1.3745 confirms resistance.
- Lower highs and lower lows visible on the 1H and 4H charts.
Entry Strategy – April 22, 2025
📌 Sell USD/CAD at: 1.3710
🎯 Take Profit 1: 1.3610
🎯 Take Profit 2: 1.3530
🛑 Stop Loss: 1.3780
📈 Confirmation needed:
- A 1H bearish engulfing candle near 1.3705
- Break of short-term trendline support
🔄 Trailing Stop: Adjust once price breaks 1.3640
Extended Market Outlook
The USD/CAD pair’s trajectory will continue to rely heavily on oil prices and relative economic strength. The following macro factors will likely play a role over the coming days:
- U.S. Flash PMI (to be released tomorrow)
- Canadian GDP monthly growth figures
- Fed Chair Powell’s speech on April 24
Volatility could rise significantly, especially around oil inventory reports.
Risk Management Tips
- Set alerts near 1.3660 to manage partial exits.
- Avoid overleveraging: keep risk < 2% of capital.
- Monitor correlated pairs like USD/JPY – April 22, 2025 for broader USD sentiment.
Market Sentiment
- Retail traders are still net long – a contrarian bearish signal.
- COT data shows funds reducing USD/CAD long exposure.
- Oil strength continues to fuel CAD buying.
External Resources
- USD/CAD Technical Chart – Investing.com
- Bank of Canada Press Releases
- Crude Oil Prices – OilPrice.com
Conclusion
USD/CAD offers a clear bearish opportunity heading into the latter half of April. Strong oil prices and favorable Canadian data, combined with weakening U.S. macro indicators, create an ideal setup for short positions.
With technical rejection at resistance and a fundamentally bearish backdrop, the trade entry at 1.3710 aligns perfectly with broader market momentum. Targets at 1.3610 and 1.3530 provide attractive exit zones.
