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      USD/CAD Sideways Consolidation: Building Up Steam or Reversing Course?

      Tank

      Economic

      Forex

      Summary:

      Markets generally expect the Bank of Canada (BoC) to keep its policy rate unchanged at 2.75% in its next policy statement on July 30th, 2025, citing persistent core inflation and strong labor market data.

      Buy

      USDCAD

      EXP
      EXPIRED

      1.36700

      Entry Price

      1.38000

      TP

      1.36000

      SL

      1.38550 +0.00275 +0.20%

      --

      Point

      EXPIRED

      1.36000

      SL

      1.38158

      CLOSING

      1.36700

      Entry Price

      1.38000

      TP

      Fundamentals 

      The Canadian dollar (CAD) started the week on a weak note, pressured by risk aversion, range-bound oil prices, and investor caution ahead of this week's economic data and policy releases. Unless new positive catalysts emerge, CAD is likely to remain soft in the near term, with potential volatility triggered by Canada's GDP report due on July 31st and the BoC's policy decision on Wednesday. Markets widely anticipate the BoC to maintain its 2.75% policy rate in the July 30th statement, citing ongoing core inflation and robust labor market conditions. 
      A stronger U.S. dollar (USD) on Tuesday supported U.S. stock index futures, boosted demand for U.S. Treasuries, and weighed on commodity currencies and emerging market assets. Optimism over progress in trade deals, combined with expectations for this week's Federal Reserve meeting, has revived confidence in dollar-denominated assets and reversed some of their earlier weakness this year. 

      Technical Analysis

      A bottom triangle consolidation pattern emerged in the daily chart of USD/CAD. The MACD's bearish momentum bars have sequentially shrunk over three periods, while RSI has formed a higher low, signals pointing to a likely sideways-up structure. Upside resistance is seen at the Bollinger Upper Band (1.378), 200-day EMA (1.389), and the psychological level of 1.4. Zooming into the 15-minute chart: After a brief upward surge, the Bollinger Bands narrowed, a classic sign of consolidation or potential reversal. As prices rise, the MACD's bullish momentum bars are gradually shrinking, indicating a bearish divergence. RSI is currently at 50, the bull-bear demarcation line. For further upside, the pair may need to consolidate sideways or pull back first. From a trading perspective, a pullback would offer better entry points with tighter stop-losses. We thus recommend going long at the support levels of the 15-minute EMA200 (1.37) and 1-hour EMA200 (1.368). The primary strategy is to buy on dips. 
      USD/CAD Sideways Consolidation: Building Up Steam or Reversing Course?_1USD/CAD Sideways Consolidation: Building Up Steam or Reversing Course?_2

      Trading Recommendations

      Trading direction: Buy
      Entry price: 1.367
      Target price: 1.38
      Stop loss: 1.36
      Support: 1.37/1.367/1.36
      Resistance: 1.378/1.386/1.39
      Risk Warnings and Investment Disclaimers
      You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

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