USDCAD braces for turbulence: Powell speaks, PMI stirs concerns

Weak US manufacturing PMI and the upcoming speech by Fed Chairman Jerome Powell could trigger a correction in the USDCAD rate towards 1.3770. Discover more in our analysis for 2 June 2025.

USDCAD forecast: key trading points

• US manufacturing PMI: previously at 48.7, projected at 49.3
• Speech by US Federal Reserve Chairman Jerome Powell
• USDCAD forecast for 2 June 2025: 1.3770 and 1.3675

Fundamental analysis

The US manufacturing PMI measures the activity of purchasing managers in the industrial sector. It reflects the state and dynamics of manufacturing processes in the country. Purchasing managers are the first to receive information about the performance of their companies, which makes PMI an important indicator for assessing the overall economic situation. Readings above 50.0 indicate an increase in production, while lower figures point to a decline.

The forecast for 2 June 2025 suggests a moderate rise in the US manufacturing PMI to 49.3. Although this marks a slight improvement, the index remains under the 50.0 threshold.

The USDCAD forecast for today takes into account Federal Reserve Chairman Jerome Powell’s speech today, which could significantly influence financial markets. Key aspects to monitor include:

• Pressure from the White House: Powell recently met with President Donald Trump, who criticised the Fed’s current interest rate stance and called for cuts. Powell reiterated that policy decisions would remain data-driven rather than politically motivated
• Market expectations: despite pressure, the Fed maintains a cautious approach, awaiting further clarity on inflation and the economic effects of tariffs
• Market impact: Powell’s comments could spark volatility across asset classes, including cryptocurrencies and equities. The USDCAD rate, sensitive to macroeconomic signals, could react swiftly

USDCAD technical analysis

On the H4 chart, the USDCAD pair has formed a Hammer reversal pattern near the lower Bollinger Band. This suggests the potential for a corrective wave. As the price remains within a descending channel, a correction towards the nearest resistance at 1.3770 is possible. If the pair rebounds from the resistance level, it may resume its downtrend.

However, the USDCAD forecast also suggests an alternative scenario, where the price falls to 1.3675 and gains downward momentum after breaking below the support level.

Summary

With the US manufacturing PMI still below the crucial 50.0 mark, investor sentiment remains cautious. Jerome Powell’s speech later today could serve as a key driver for a further USDCAD move. Technical analysis suggests a correction towards 1.3770 before the downtrend resumes.