When we last analysed the USD/CAD chart on 4 June, we identified a descending channel that remains relevant.

On 5 June, the pair reached a new low for 2025, and it is possible that bears will attempt to extend this move further over the course of the month.

Why is USD/CAD declining?

The Canadian dollar appears to be strengthening amid speculation that a trade agreement between the US and Canada could be finalised soon — possibly on 15 June, when the G7 summit is due to be held in Canada.

Media reports highlight several indicators supporting this view:
→ Prime Minister Mark Carney stated that Canada will meet its NATO spending target of 2% of GDP.
→ Canada refrained from retaliatory tariffs on steel and aluminium.
→ The US ambassador to Canada confirmed that “secret” negotiations are ongoing.

Technical Analysis of the USD/CAD Chart

Note that the R-line, which divides the lower half of the descending channel into two equal parts, acted as resistance — price reversed downward from this line and accelerated lower (as indicated by the arrow). This reinforces the view that bears currently dominate the USD/CAD market.

For now, the 1.3650 level appears to be a support zone for bulls, but its strength may be tested today as markets react to US inflation data. The Consumer Price Index (CPI) report is scheduled for release today at 15:30 GMT+3. Be prepared for potential spikes in volatility.

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