Ella 
The USD/CAD pair has started the new week on a weaker note as some selling of the US dollar (USD) has occurred, although bearish conviction is lacking and has reversed a move lower into the 1.4325 area during the Asian session. However, spot prices remain confined to Friday’s wider range and are currently trading just below the mid-1.4300 level, little changed.
Even though the Federal Reserve has upgraded its inflation forecasts, investors appear convinced that a tariff-driven slowdown in the U.S. economy could force the central bank to resume its rate-cutting cycle soon. This, coupled with positive risks, has failed to help the safe-haven dollar continue its three-day rebound from multi-month lows, acting as a key factor exerting resistance on the USD/CAD pair.
Crude oil prices, meanwhile, attracted some selling, moving away from a three-week high hit on Friday as traders prepared for so-called reciprocal tariffs to be imposed by U.S. President Donald Trump on April 2. Hopes for a positive outcome to the Russia-Ukraine peace talks further weighed on the black liquid, which in turn weakened the commodity-linked Canadian dollar and helped limit any substantial downside in the USD/CAD pair.
In addition, Canada’s new Prime Minister Mark Carney called for an early election on April 28. This further dampened traders’ appetite for aggressive bullish bets on the Canadian dollar (CAD), suggesting that the path of least resistance for the USD/CAD pair is to the upside. Nonetheless, last week’s failure around 1.4400 makes it more prudent to wait for strong follow-up buying before making fresh bullish bets.
Looking ahead, traders are now looking forward to the release of the US PMI flash report later in the North American session. Additionally, speeches by FOMC members and broader risk sentiment will drive demand for the dollar. This, coupled with oil price dynamics, should generate short-term opportunities around the USD/CAD pair. However, the fundamental backdrop calls for caution before making new directional bets.
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