Fed under fire — USDCAD tumbles amid policy chaos

USDCAD is falling sharply, with the pair trading at 1.3791. Full breakdown in our forecast for 21 April 2025.

USDCAD forecast: key trading points

• Expansive tariffs and Trump’s unpredictable trade stance weigh heavily on the US dollar
• Investors are exiting dollar assets in favour of more stable alternatives
• USDCAD forecast for 21 April 2025: 1.3735

Fundamental analysis

USDCAD is under pressure following a breakdown below key support at 1.3825. The US dollar is weakening sharply as investors grow increasingly concerned about the Federal Reserve’s independence amid political interference.

Former President Donald Trump’s team is reportedly exploring ways to reorganise the Fed. According to White House adviser Kevin Hassett, the possibility of dismissing Fed Chair Jerome Powell remains on the table — a comment that spooked markets and triggered a wave of risk aversion toward dollar-denominated assets.

Additionally, Trump’s ongoing tariff initiatives and unpredictable trade policy are amplifying economic uncertainty. Investors are shifting capital out of the US dollar, seeking refuge in more stable currencies — including the Canadian dollar, which benefits from firm crude oil prices and relatively stronger domestic sentiment.

USDCAD technical analysis

USDCAD is breaking lower after falling through the 1.3825 support level. Today’s outlook anticipates a short-lived corrective pullback toward the upper boundary of the descending channel, followed by a move down toward 1.3735.

Technical indicators confirm the bearish trend: Moving Averages maintain a downward slope, while the Stochastic Oscillator sits deep in oversold territory — allowing for a minor rebound, but not reversing the dominant bearish momentum.

Summary

The outlook for USDCAD remains bearish as political instability in the US and tariff uncertainty continue to erode confidence in the dollar. Technical analysis confirms downward pressure, with the next key target at 1.3735. A brief corrective bounce is possible, but the broader trend favours continued selling.