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USD/CAD’s fall from 1.4298 continued last week and met 38.2% retracement of 1.3730 to 1.4298 at 1.4081 already. Initial bias stays on the downside this week, sustained break there will target 61.8% retracement at 1.3792 next. On the upside, above 1.4080 minor resistance will turn intraday bias neutral first.

In the bigger picture, current development argues that corrective rebound from 1.3480 has completed at 1.4298 after hitting 61.8% retracement of 1.4791 (2025 high) to 1.3480 at 1.4290. Sustained break of 55 W EMA (now at 1.3927) will solidify this case. That would in turn indicate that fall from 1.4791 might be ready to resume. Retest of 1.3480 low should be seen next. For now, risk will stay on the downside as long as 1.4298 holds.

In the long term picture, strong support from 55 M EMA (now at 1.3654) argues that up trend from 0.9056 (2007 low) is still in progress. Break of 1.4791 is in favor at a later stage. However, firm break of 55 D EMA will argue that the five-wave up trend has already completed.

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The aggressive reversal has taken USD/CAD much lower than we initially expected, but we have to respect the price action. On the daily chart, the market is turning lower from the 61.8% Fibonacci retracement level. However, the current decline could still unfold as another three-wave move from the recent high, potentially representing wave B within a seven-swing recovery. This means the higher-degree recovery from the February lows may not be complete yet.

USDCAD Daily ChartIn the short term, the strong decline on the 4-hour chart suggests that more weakness could follow towards the lower boundary of the bullish channel visible on the daily chart. We could still see some corrective rallies, ideally towards the 1.4150 resistance area, before another sell-off. However, if the current decline is unfolding in only three waves, USD/CAD could be approaching important support around 1.4000, where a reversal higher may eventually follow.

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Summary:

USD/CAD has dropped in the last six consecutive sessions.
The Canadian dollar has soared because of the rising oil prices.
Economists expect the Bank of Canada to hike interest rates next week.

USD/CAD continues its recent freefall as the Canadian dollar stages a strong comeback. It has slipped in the last six consecutive days, reaching its lowest level since September 22nd. It is down by close to 2% from its peak this month. 

Canadian Dollar Jumps as Catalysts Jump
The USD/CAD pair is falling for two crucial reasons. One of them is the fact that crude oil prices have continued soaring this month. Brent, the international benchmark, has jumped to $111.77 today and is nearing the important resistance level of $112. Such a move will raise the probability of oil soaring to $120 in the near term.

Crude oil prices are rising as the crisis in the Middle East escalates, with Iran continuing to shoot ships that are crossing the Strait of Hormuz. Saudi Arabia and Houthis are escalating their attacks. These developments benefit Canada since it is one of the biggest oil exporters in the world, with most of its oil coming to the United States. 

The USD/CAD pair is also falling because of the potential Federal Reserve and Bank of Canada (BoC) divergence. Most economists expect the Fed to leave interest rates unchanged between 3.75% and 4% in its meeting next week. That happened after US macro data showed that the economy created just 29k jobs last month. 

On the other hand, analysts expect that the Bank of Canada will hike rates this month. Odds of the rate hike happening have jumped to over 80% on Polymarket, the leading predictions platform. If this happens, it will bring rates to 2.50%, bridging the gap between the US and Canada. 

Odds that the BoC will hike rates rose after the last consumer inflation report. Canada said that the core CPI rose 2.2% in September, while the headline figure rose 3.1%.

USD/CAD Forecast: Technical Analysis

USD/CAD chart | Source: TradingView

On the charts, we see that the USD/CAD pair has slumped in the past few days. It dropped from a high of 1.4297 to the current 1.4020, making the Canadian dollar one of the best-performing currencies.

Based on trend-following principles, there is a likelihood that the pair will continue falling, potentially to the 50% retracement level of 1.3887. However, a closer look shows that it has settled at the 100-day moving average, while the Average Directional Index (ADX) has dropped to 32.80. These technicals suggest that it may have a brief rebound as investors buy the dip.

Canadian Dollar Forecast: Goldman Brings October Hike Into Focus After Alberta Vote The Canadian Dollar has gained against the US Dollar as Goldman brings forward its rate call, but Sterling has a tightening story of its own. Goldman Sachs now expects the Bank of Canada to raise interest rates on 28 October, bringing forward its call as rising inflation expectations add to the case for tightening despite weak employment.

The revision comes as the US Dollar to Canadian Dollar exchange rate extends its decline, trading at 1.4054 at 10:41 BST on Wednesday, down 0.09% on the day after a 0.28% fall on Tuesday.

Goldman forecasts a 25-basis-point increase to 2.50% next week.

MUFG also sees an October move becoming more likely, although its argument depends on policymakers prioritising future inflation risks and markets continuing to anticipate a hike.

The political backdrop has also improved following Alberta's vote to remain part of Canada.

Preliminary results showed roughly three-quarters of voters rejecting the proposal to begin a process towards a binding separation referendum.

For currency investors, that reduces an immediate source of uncertainty surrounding the oil-producing province, giving the Canadian Dollar a more favourable backdrop alongside rising interest-rate expectations.

The result does not resolve Canada's trade difficulties, however, and should not be confused with the inflation evidence behind Goldman's revised BoC forecast.

Image: USD/CAD exchange rate 48-hr chart Goldman Changes Its Call After the Surveys The business and consumer surveys have shifted attention towards the risk that higher costs become embedded in pricing decisions.

Goldman economists Megan Peters and Joseph Briggs wrote: "The message from today's surveys was more hawkish than we anticipated, with greater emphasis on improvements in activity, continued resilience, and price pressures than the potential headwinds from rising trade tensions with the US."

The economists also pointed to Governor Tiff Macklem's recent public remarks: "Combined with Governor Macklem's hawkish comments at this past weekend's IMF meetings, we now expect that the BoC will deliver a 25bp hike at next week's October meeting."

Consumers' five-year inflation expectations rose to 3.9% from 3.4%, while roughly half the businesses surveyed intended to pass some or all of their higher energy and tariff costs to customers.

That combination gives the BoC reason to worry about inflation persisting even without a strong jobs recovery.

But the Bank of Canada's survey findings carry an important timing qualification: around three-quarters of business interviews preceded the breakdown in US-Canada trade talks.

Responses collected after the breakdown showed weaker confidence and investment intentions alongside higher inflation expectations, leaving policymakers facing both growth and price risks.

The caution in the earlier ING and CIBC assessment of Canada's outlook therefore remains relevant, even as Goldman puts greater weight on the surveys' inflation warning.

An October Hike Would Leave December Open Goldman has also accelerated its expected second increase, but stops short of forecasting consecutive hikes.

Peters and Briggs wrote: "We are also pulling forward our forecast for a final 25bp hike to 2.75% (the center of the BoC's neutral rate range) to January 2027."

"Although a final hike in December remains a possibility, we believe that a still benign inflation backdrop and more visible headwinds from US trade tensions support a more gradual pace of policy normalization."

MUFG identifies a route to a faster repricing, rather than making the same firm forecast.

Senior currency analyst Lee Hardman cautioned: "However, it is not a done deal given the recent softer economic data flow from Canada including the second consecutive month of heavy job losses in September."

"A decision to raise rates this month would then encourage speculation that they could follow that up quickly with a second hike before the end of this year in December providing more support for the Canadian dollar."

Much of the initial adjustment has already happened.

Hardman recorded the shift on Tuesday: "There are currently around 21bps of hikes priced in compared to only 9bps at the end of last week."

Higher expected Canadian rates can support the currency by improving its prospective yield, but delivering an increase that investors largely anticipate may offer less additional support than signalling another soon afterwards.

Why GBP/CAD Faces a Different Test The Pound-to-Canadian Dollar exchange rate was up 0.05% at 1.8821 at the same time on Wednesday, illustrating Sterling's relative resilience despite the Canadian currency's gains against the US Dollar.

Wednesday's UK inflation release showed annual CPI rising to 3.5% from 3.1%, adding pressure on the Bank of England after stronger labour-market figures.

Before that release, Hardman wrote: "We continue to expect the BoE to hike rates next month and deliver a second hike early next year."

"A view that is already well priced into the UK rate market which is anticipating even more tightening and has almost three hikes priced in by March of next year."

MUFG's support for Sterling also depends on the forthcoming UK Budget preserving confidence in fiscal consolidation.

Image: Pound to Canadian Dollar rate chart for last 2 days. What This Means for USD/CAD and GBP/CAD USD/CAD's decline leaves the Canadian Dollar approaching next week's decision with substantial tightening already anticipated. A hike accompanied by encouragement for a December follow-up could extend that strength, whereas an emphasis on trade damage and patience would fit Goldman's slower January timetable.

For GBP/CAD, Canadian tightening alone may struggle to dislodge Sterling while a November BoE increase remains expected. A more urgent Canadian policy message, or UK Budget measures that undermine confidence, would give the Canadian Dollar a clearer advantage.

A BoC hold would challenge the rate expectations supporting the recent Canadian Dollar recovery and could lift both pairs. The employment weakness highlighted by MUFG keeps that risk alive ahead of 28 October.

The Canadian dollar strengthened despite a slightly softer-than-expected CPI report, as rising longer-term inflation expectations complicated the Bank of Canada's rate outlook. With the BoC meeting on 28 October, conflicting inflation signals could shape expectations for USD/CAD and AUD/CAD.

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Canadian Dollar Holds Firm as BoC Inflation Risks Persist
The Canadian dollar strengthened against most FX majors on Monday despite a slightly softer-than-expected CPI report and reduced expectations of an October BoC hike. Headline CPI rose 3.1% y/y, just below the 3.2% expected, while trimmed mean inflation eased to 1.84%. That divergence suggests inflationary pressures remain relatively contained beneath the headline figure, giving the BoC some breathing room ahead of its 28 October meeting.

BoC Surveys Reveal Persistent Inflation Risks
However, the BoC's quarterly surveys presented a less dovish picture. While consumer inflation expectations edged lower over the one- and two-year horizons, five-year expectations rose to 3.9% from 3.4% in Q2, their highest level in the available series since 2015. Businesses also reported persistent inflation pressures from energy prices and tariffs, raising concerns that price increases could become more widespread.

This divergence may help explain why CAD remained supported despite softer near-term BoC pricing. While an October hold appears increasingly likely, elevated longer-term inflation expectations suggest the tightening cycle may not be over. Attention now turns to whether the BoC's updated projections reinforce expectations of further hikes later this year or into 2027.

USD/CAD Technical Analysis: US Dollar vs Canadian Dollar
The potential pullback I had been circling for USD/CAD has finally got underway, with last week’s bearish engulfing candle snapping a five-week winning streak. It is also the third candle of the bearish reversal pattern known as an evening star formation. Prices continued lower on Monday following the hotter long-term inflation outlook, even though the US dollar index held its ground.

The daily chart shows that Monday’s low found support almost perfectly at the monthly pivot point and 50-day EMA. And with the daily RSI (2) oversold below 10 and a lower wick on the daily candle, perhaps we’ve seen the best part of the initial move lower for USD/CAD. Bears may therefore be seeking to fade smaller bounces into resistance levels from here, which brings the 2025 high, 1.42 handle or June high into focus – in anticipation of a move down towards 1.40.

Source: ICE, TradingView

AUD/CAD Technical Analysis: Australian Dollar vs Canadian Dollar
Momentum has turned lower on AUD/CAD after a very brief parity party – and with traders less certain of RBA hikes, the cross has the potential to move lower. Note that the AU–CA two-year yield spread is heading lower ahead of prices as markets continue to reprice relative expectations between the RBA and BoC.

Last week’s candle wasn’t quite a bearish engulfing – but it was close enough. The daily chart shows a shooting star candle on Thursday and a lower high, ahead of a direct break beneath the monthly pivot point down to monthly S1. While AUD/CAD is showing signs of support around S1, bears may be seeking to fade minor rallies within Thursday’s bearish candle in anticipation of a move down to the April 2021 high or 200-day EMA. A break beneath these levels would bring the 50-week EMA into focus near the 0.97 handle.

Source: ICE, TradingView

The trading week is just getting underway, and one of the most notable developments in the currency market has been the renewed strength of the Canadian dollar. This can be seen in the recent performance of USD/CAD, which has now declined for three consecutive sessions and is down approximately 1.0% over the period, highlighting the CAD's growing strength against the U.S. dollar.

For now, selling pressure around the pair remains relevant even after the release of Canadian inflation data. This is largely because the Canadian bond market has maintained relatively stable yields, helping to support demand for Canadian dollar-denominated assets. At the same time, the relationship between oil prices and the CAD has begun to regain importance in recent sessions. As long as these factors remain in place and the U.S. dollar continues to move through a corrective phase, selling pressure on USD/CAD could remain an important theme in the days ahead.

Canada Inflation Day Arrives
Canada's latest inflation figures were released during today's session. Overall, the main core inflation measures came in slightly below market expectations. The Trimmed CPI y/y, which excludes more volatile components, was reported at 1.8% versus an expected 1.9%, while Median CPI y/y, a measure used to track underlying inflation trends, came in at 1.9% compared to the 2.0% forecast.

However, annual CPI remains near 3.1%, highlighting that inflation pressures are still relatively elevated. Although some indicators came in below expectations, the data does not yet point to a sufficiently consistent slowdown that would justify a significantly more dovish stance from the Bank of Canada in the coming months. Current inflation levels also remain well above the lows seen in February, when annual CPI was close to 1.8%.

Source: TradingEconomics

This remains important because, even after the inflation release, Canadian 10-year government bond yields have shown little sign of weakness. Instead, yields continue to develop near the 4.0% area, maintaining a relatively stable environment that continues to support the attractiveness of Canadian dollar-denominated investments.

At the same time, U.S. dollar strength has begun to moderate. The DXY, which measures the dollar against its main peers, continues to trade near the 102-point area without being able to establish a sustained bullish trend. As a result, CAD has found room to recover part of the ground lost in previous weeks.

Source: TradingEconomics

Taking all of this into account, it is important to note that while inflation data did not surprise to the upside, it also failed to show a meaningful slowdown in price pressures. This has helped preserve stability in Canada's bond market and, combined with the recent loss of momentum in the U.S. dollar, has allowed the Canadian dollar to regain relevance in the short term. As long as this dynamic remains in place, selling pressure around USD/CAD could continue to be a dominant theme.

Is the Relationship with Oil Becoming Relevant Again?

Another important factor to consider is the close relationship between the Canadian economy and the energy sector. Canada remains one of the world's largest oil producers and exporters, meaning that significant moves in crude oil prices often have an important impact on demand for the Canadian dollar. As oil prices rise, export revenues tend to increase, supporting stronger capital inflows and helping strengthen the CAD in the short term.

Over recent sessions, this relationship has begun to regain relevance. The CXY, an index that measures the strength of the Canadian dollar, continues to advance while WTI crude oil maintains a bullish trend that has pushed prices increasingly closer to the $100 per barrel area.

The most interesting element emerges when looking at the short-term correlation between both markets. The correlation coefficient currently stands near 0.56, reflecting a meaningful positive relationship between recent movements in oil and the Canadian dollar. This suggests that rising crude prices may be providing additional support to CAD’s recent recovery. It is important to remember that correlation can change over time.

Source: TVC, StoneX, Tradingview

This relationship is particularly important because it had weakened during previous months. However, the recent strength in oil prices appears to be bringing it back into focus and may help explain part of the resilience currently being displayed by the Canadian dollar against the USD. As long as oil remains in an upward trend and the positive correlation persists, this factor could continue supporting downside pressure on USD/CAD in the coming sessions.

USD/CAD Technical Forecast

Source: StoneX, Tradingview

The bearish bias is regaining relevance: Although USD/CAD attempted to develop a short-term bullish trendline in recent weeks, that structure gradually lost momentum as price approached highs not seen for several months. A renewed bearish bias is now beginning to emerge on the chart. However, it is important to remember that a lack of direction remains a key characteristic of the market and, unless important support levels are broken, a broader period of consolidation could still develop over the coming weeks.

 
MACD: The MACD histogram continues to fluctuate very close to the 0 neutral line, reflecting a relatively balanced dynamic in short-term moving-average momentum. This reading continues to support the possibility that a phase of indecision remains relevant on the chart.

 
RSI: A similar picture can be observed in the RSI, which continues to trade near the 50 neutral level. This behavior reflects a relatively balanced momentum environment and suggests that the recent lack of direction remains an important feature of price action.

 
Key Levels:

1.42321 – Key Resistance: A major high observed over recent months and the most important upside barrier on the chart. A move back toward this level could restore relevance to the bullish bias and support a more consistent bullish structure.

 
1.41606 – Near-Term Barrier: A level that aligns with significant retracement zones observed several weeks ago and could become the main area to monitor in the event of short-term bullish corrections.

 
1.39959 – Critical Support: The last major support barrier on the daily chart and a level that coincides with the 50-period simple moving average. Sustained moves below this area could reinforce the bearish bias and open the door to a more established downtrend in the weeks ahead.

 
Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

USD/CAD Forecast: Scotiabank Sees Little Support Before 1.40
The Canadian Dollar is recovering as US yield support fades, but Scotiabank's fair-value estimate now sits close to the market after USD/CAD retreat.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate slipped further on Friday, with FX strategists at Scotiabank warning of little technical support before 1.40 after the pair broke below 1.4200.

USD/CAD traded near 1.4152 at the time of writing, down 0.29% from Thursday's close and almost 0.9% below Monday's closing level.

Latest-Exchange Rates:

Dollar to Canadian Dollar (USD/CAD): 1.41525 (-0.29%)

Pound to Canadian Dollar (GBP/CAD): 1.889388 (+0.30%)

Euro to Canadian Dollar (EUR/CAD): 1.592321 (+0.04%)

Scotiabank's latest short-term assessment is neutral/bearish.

Describing the earlier North American session, the bank said: "The CAD is entering Friday's NA session with a modest gain, up 0.2% vs. the USD while showing losses on the crosses against most of the G10 currencies in an environment of broad-based USD weakness and a market tone that is suggestive of risk appetite."

That leaves the Canadian currency vulnerable to a reversal in the wider Dollar sell-off, even as domestic interest-rate expectations offer more support.

Image: USD to CAD exchange rate performance over this trading week.

Canadian rate expectations narrow the US advantage
Scotiabank links the improved domestic support to the bond market:

"Rate expectations have firmed modestly on the week, delivering a welcome narrowing in US-Canada yield spreads in a manner that has pressured our USDCAD FV estimate over the past week or so. FV is currently estimated at 1.4140, largely closing the gap to spot."

A smaller US yield advantage can reduce the incentive to hold US Dollars rather than Canadian Dollars.

But at 1.4140, the bank's fair-value estimate is only around 12 pips below the latest market rate, leaving little further Canadian Dollar upside on that measure alone.

A decline to 1.40 would therefore go beyond the adjustment implied by its current valuation estimate.

The Bank of Canada's next decision and Monetary Policy Report are due on 28 October.

In its morning assessment, Scotiabank said "markets are currently pricing 9bpts of tightening with 23bpts expected by December."

That indicates some tightening is anticipated this month, with almost a quarter-point increase priced cumulatively by December, rather than a confirmed decision to raise rates.

Friday's housing starts release showed construction rising 3% in September to an annualised 248,896 units, although the six-month trend was virtually flat.

Limited support before 1.40, with political risk ahead
The chart assessment points to more room for a decline than the valuation model.

Scotiabank says "the recent bearish turn in USDCAD is notable, with a sharp reversal from local peaks around 1.4300."

"The extension below 1.4200 is important, with a move that has seen a sharp moderation in bullish momentum dragging the RSI back to the neutral threshold at 50."

The Relative Strength Index measures momentum, so a reading near 50 suggests the previous upward impulse has faded rather than that the pair is already oversold.

The latest assessment follows our earlier coverage of Scotiabank's concerns about stretched USD/CAD momentum.

Scotiabank says: "We see limited support between current spot and 1.40. Resistance is now expected above 1.4200."

A sustained rebound above that resistance would weaken the case for an immediate slide towards 1.40.

The downside reference is roughly 1.1% below the current rate, although Monday's Alberta vote could complicate the Canadian Dollar's progress.

Scotiabank also warns: "Near-term domestic risk is elevated into Monday's Alberta vote on the possibility of a future referendum."

The provincial government's explanation of the separation question makes clear that voters are choosing whether to begin the legal process for a later binding referendum: "The referendum question does not directly trigger Alberta separating from Canada."

USD/CAD Exchange Rate FAQ
Could USD/CAD fall to 1.40?

Scotiabank sees limited technical support before 1.40, but this is a downside reference rather than a dated forecast target.

Where is USD/CAD resistance?

Scotiabank expects resistance above 1.4200 following the reversal from local peaks around 1.4300.

What is Scotiabank's fair-value estimate?

The bank estimates fair value at 1.4140, close to Friday's market rate of 1.4152.

U.S. Dollar Pulls Back Amid Falling Treasury Yields

DXY 151026 4h Chart U.S. Dollar Index is losing ground despite strong Retail Sales data and higher-than-expected PPI report.

Retail Sales increased by +0.8% month-over-month in September, compared to analyst forecast of +0.3%.

PPI increased by +1.3% month-over-month in September, while analysts expected that it would grow by +0.5%.

Traders also had a chance to take a look at the Initial Jobless Claims report. The report showed that 199,000 Americans filed for unemployment benefits in a week, mostly in line with the analyst forecast of 200,000.

The strong pullback in Treasury yields served as a negative catalyst for the American currency. Treasury yields moved lower as traders rushed to buy bonds amid sell-off in AI stocks.

In case U.S. Dollar Index settles below the 101.90 level, it will head towards the nearest support, which is located in the 101.50 – 101.65 range. On the upside, a successful test of the resistance at 102.35 – 102.50 will open the way to the test of the next resistance level at 103.15 – 103.30.

EUR/USD Rebounds From Yearly Lows

EUR/USD 151026 4h Chart EUR/USD moved higher as traders focused on developments in bond markets and ignored the weak Euro Area Industrial Production report. The report indicated that Euro Area Industrial Production decreased by -0.5% month-over-month in August, compared to analyst forecast of +0%.

If EUR/USD stays above the 50 MA at 1.1200, it will head towards the resistance level at 1.1250 – 1.1265. On the support side, a move below the 1.1175 level will push EUR/USD towards the support at 1.1075 – 1.1090.

EUR/USD Price Forecast

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GBP/USD Moves Higher As UK GDP Exceeds Estimates

GBP/USD 151026 4h Chart GBP/USD gained ground as traders focused on the better-than-expected UK GDP report. The report showed that UK GDP increased by +0.1% month-over-month in August, compared to analyst forecast of -0.1%.

The nearest resistance level for GBP/USD is located in the 1.3285 – 1.3300 range. In case GBP/USD climbs above the 1.3300 level, it will head towards the next resistance, which is located in the 1.3385 – 1.3400 range.

USD/CAD 151026 4h Chart USD/CAD pulled back as traders focused on the strong rebound in precious metals markets. Gold gained 1%, while silver was up by +2.4%.

Currently, USD/CAD is trying to settle below the 1.4200 level. In case this attempt is successful, USD/CAD will head towards the support level at 1.4135 – 1.4150. On the upside, a successful test of the resistance level at 1.4235 – 1.4250 will push USD/CAD towards the 1.4300 level. If USD/CAD climbs above 1.4300, it will head towards the next resistance at 1.4350 – 1.4365.

USD/JPY Remains Stuck Near Resistance At 158.00 – 158.50

USD/JPY 151026 4h Chart USD/JPY is mostly flat despite the strong pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 4.75% level, while the yield of 10-year Treasuries settled below 5.10%.

The technical picture remains unchanged as USD/JPY is stuck near the resistance level at 158.00 – 158.50. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge. A move above the 158.50 level will open the way to the test of the resistance level at 160.00 – 160.50.

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Canadian Dollar Technical Outlook: USD/CAD Short-term Trade Levels USD/CAD remains in a well-defined October range after extending a five-week advance from the September low The rally has stalled directly beneath a major resistance zone, with bearish momentum divergence warning that the advance may be vulnerable. A confirmed break above the range ceiling would strengthen the continuation case and expose the next major upside objectives The monthly range low remains the key near-term support threshold for preserving the bullish structure. Hotter U.S. CPI has revived near-term Fed tightening expectations, with PPI, retail sales, and additional Fed commentary next in focus. Resistance 1.4292 (key), 1.4375/83, 1.4496-1.4513- Support 1.4194-1.4202 (key), 1.4140, 1.4083 USD/CAD remains firm after a powerful September advance, but the latest push has run into a major technical ceiling, and momentum is beginning to show signs of strain. Price is now holding within a well-defined monthly range, leaving the immediate focus on whether buyers can force a decisive break higher or whether the current stall develops into a deeper correction. Today’s hotter-than-expected U.S. CPI has added fresh support to the dollar by reviving expectations for near-term Fed tightening, but the technical picture remains finely balanced as traders look to upcoming U.S. data and the weekly close for confirmation of the next move. Battle lines drawn on the USD/CAD short-term technical charts.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Loonie setup and more. Join live on Monday’s at 8:30am EST.

Canadian Dollar Price Chart – USD/CAD Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView

Technical Outlook: In last month’s Canadian Dollar Short-term Outlook, we noted that USD/CAD was, “testing pivotal resistance and the reaction off this mark will likely fuel the next directional move in price. From a trading standpoint, losses would need to be limited to 1.3854 IF price is heading higher on this stretch with a close above 1.3955 still needed to fuel the next major leg of the advance.” USD/CAD broke through resistance the following day with a five-week advance extending more than 3.9% off the September low.

The rally is testing major resistance at the 61.8% retracement of the 2025 decline at 1.4292 with a well-defined October opening-range taking shape just below. Note that the median line of the yearly pitchfork converges on the June high day / high week close at 1.4194-1.4202 and now defines the monthly range low. The immediate focus is on a breakout in the days ahead to confirm the next directional move in USD/CAD.

Canadian Dollar Price Chart – USD/CAD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView

Notes: A closer look at USD/CAD price action highlights this 100 pip multi-week range between key technical levels. A topside breach / daily close above 1.4292 is needed to mark uptrend resumption with subsequent resistance objectives eyed at the 2025 March high-week reversal close (HWC) and the 2025 yearly open at 1.4375/83. The next major technical consideration is eyed at 1.4496-1.4513 – a region defined by the 2025 January high day close (HDC), the 100% extension of the yearly advance, and the 2020 HDC. Both these levels represent areas of interest for possible topside exhaustion / price inflection IF reached.

A break below the monthly low would threaten a larger correction within the yearly uptrend with subsequent support objectives eyed at the November high at 1.4140 and the 38.2% retracement of the late-August rally at 1.4083. Key support rests with the July low day close (LDC) and the 50% retracement at 1.4011/16. Note that this level converges on the 25% parallel of the yearly pitchfork (daily chart) and losses below this threshold would suggest a more significant trend reversal is underway.

Bottom line: USD/CAD is trading within a well-defined monthly range just below key resistance. Bearish momentum divergence on the daily chart warns that the rally may be vulnerable here despite today’s push post-CPI. From a trading standpoint, the focus remains on a breakout of this key zone – ultimately, losses would need to be limited to 1.4194 IF price is heading higher on this stretch with a breach / daily close above 1.4292 needed to fuel the next major leg of the advance.

Event risk remains elevated for USD/CAD into the close of the week following today’s hotter-than-expected U.S. CPI report, which showed headline inflation accelerating to 3.7% year over year in September with core prices also climbing to 2.6%. The data has revived expectations for near-term Federal Reserve tightening and lifted Treasury yields, providing fresh support for the U.S. dollar. Attention now turns to Thursday’s U.S. PPI and retail-sales reports, followed by industrial-production data and additional Fed commentary on Friday. With Canada’s next major inflation release not due until October 19, the near-term impulse for USD/CAD remains centered on U.S. data and rate expectations. Stay nimble into the releases and watch the weekly close for guidance. Review my latest Canadian Dollar Weekly Forecast for a closer look at the longer-term USD/CAD technical trade levels.

Key USD/CAD Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts Japanese Yen Short-term Outlook: USD/JPY Breakout Risk Builds Below 200-Day Average Australian Dollar Short-term Outlook: AUD/USD Rebound Challenges September Downtrend US Dollar Short-term Outlook: USD Four-Week Rally Stalls Below Key Resistance Swiss Franc Short-term Outlook: USD/CHF Rebound Tests Broken Uptrend Euro Short-term Outlook: EUR/USD Selloff Nears Critical Yearly Support British Pound Short-term Outlook: GBP/USD Selloff Breaks June Uptrend Gold Price Short-term Outlook: XAU/USD Bulls Fight to Stabilize at Pivotal Support Written by Michael Boutros, Senior Technical Strategist

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Summary:

USD/CAD fell over 0.4% after a sharp rejection at the 1.4300 resistance ceiling, returning to its range between 1.4200 and 1.4299
Factors holding back CAD's potential gains include wider US-Canada interest rate gaps, the Bank of Canada's dovish policy, and slow domestic economic activity
To keep the downtrend going, it'll need to break clearly below 1.4200. Traders also need to look for weaker momentum indicators and fundamental confirmation from narrower rate differences
The USD/CAD pair closed yesterday down over 0.4% and opened lower today. It’s been stuck in a tight range, roughly around 1.4200-1.4299, for a few days. The recent high touched 1.4300, a key psychological and technical level, before pulling back. We discuss what this means for the pair’s outlook

Has the Rejection at 1.4300 Triggered a Reversal?
A sharp retreat from a resistance level held for months might signal weakening upward momentum. But figuring out if this is just a short-term correction or a real trend shift means a close look at the market’s structure.

On the daily chart, the pair still moves within an upward channel from September. The 18-month high it hit on October 9th, around 1.4298, has acted more like a ceiling than a springboard for further gains.

A clear daily close below the nine-day exponential moving average, now around 1.4220-1.4235, would start to chip away at the short-term positive structure.

Should the pair consistently trade under 1.4200, it might head for the channel’s lower boundary, estimated at 1.4110-1.4130, and the 50-day EMA near 1.4060. But until those levels break, the pullback from 1.4300 looks like a temporary pause in an uptrend, not a confirmed reversal.

What Is Needed to Sustain the Downtrend?
While the pair stays above 1.4200, expect the current trading range to hold, and 1.4300 remains a caution point. One trading session under the range’s floor isn’t enough to show a trend change. However, a confirmed close below it would definitely shift the market’s structure.

Additionally, the Canadian dollar needs the US dollar to weaken to gain ground. Right now, the US Dollar Index sits near an 18-month high, making that a bit more difficult. Plus, the Federal Reserve hiked interest rates in September, their first increase in over three years.

All eyes are on today’s US inflation report. A hotter-than-expected number might boost expectations for more Fed rate hikes, probably helping the dollar. If the reading comes in lower, however, it could spark renewed bets on rate cuts. A cooler inflation report could give sellers the push they’re looking for.

For USD/CAD to see a lasting decline, oil prices need to remain elevated. As a major crude oil exporter, Canada directly gains from higher West Texas Intermediate (WTI) prices. A strong rebound in energy prices usually helps Canada’s trade balance and props up its dollar.

What Could Disrupt CAD Gains?
The Bank of Canada (BoC) has kept a cautious monetary policy, holding its benchmark interest rate below the Federal Reserve’s. This rate gap makes US dollar assets more appealing for their yield, potentially drawing institutional investors to buy USD/CAD on dips.

Should Canada see any surprise weakness in its employment numbers or consumer spending, the BoC might well think about cutting rates again. That would probably hurt the Canadian dollar.

Statistics Canada reported 68,000 fewer jobs in September, pushing the unemployment rate to 6.5%. This kind of data makes a quarter-point rate cut on October 28th look more likely. If the BoC cuts rates while the Federal Reserve keeps its policy rate steady, that’ll probably weigh down the Canadian dollar.

Ongoing trade tensions between the US and Canada also put pressure on the Canadian dollar. Any negative news about tariffs could quickly reverse recent positive gains.

Did the rejection near 1.4300 confirm a reversal in USD/CAD?

Not quite. The pair’s still within its ascending channel. We’d need a sustained break below 1.4200 for the bias to really turn lower.

How do interest-rate differentials influence the pair?

The significant rate difference between the Fed and the Bank of Canada continues to favor the U.S. dollar. This also limits the Canadian dollar’s potential gains right now.

Which upcoming macroeconomic data releases present the biggest volatility risk for USD/CAD?

Keep an eye on US CPI inflation reports, Canadian labor market data, and the next central bank policy announcements from both the Fed and the Bank of Canada. These events will truly dictate the USD/CAD’s direction.

The Dollar-CAD has been in a five week strong uptrend.

Price has returned to a rising weekly trendline and near the 61.8% Fib retracement of the decline since 2025.

Weekly Stochastic RSI is also overbought, reading roughly 8 and favouring a reversal.

After such a sharp move, buyers now have to prove they can push through resistance rather than simply reach it.

DXY is also near a potential resistance, and similarly with an overbought signal.

The dollar index is moving up from an ascending channel and towards overhead resistance around the 102 to 103 area.

If USD/CAD and DXY both print a rejection at their key levels, it would hint at a weakening dollar in the coming weeks.

Why the Canadian Loonie is weakThe latest Canadian labour numbers do not give the Bank of Canada much room to sound hawkish.

Statistics Canada said employment fell by 68,000 in September after a 42,000 decline in August. The unemployment rate rose to 6.5%, and the participation rate slipped to 64.8%, its lowest level since December 1997 outside the pandemic period.

That is not the profile of an economy inviting tighter policy. Even if inflation risks remain alive because of energy and trade frictions, a softer jobs market makes it harder for policymakers to lean against the economy with higher rates. At a minimum, it argues for caution.

The Bank of Canada already held its policy rate at 2.25% on 2 September. Its next decision is not due until 28 October. So unless Canadian data suddenly rebound, the market has little reason to price an aggressive move higher from Ottawa in the near term.

Why has USD/CAD climbed so quickly?Another explanation comes from the bond market. The spread between US and Canadian 10-year yields has been rising sharply, reaching around 1.316 percentage points on the weekly chart.

A rising spread means the market is rewarding the US with a much higher long-term return than Canada. 

That can happen because traders expect firmer US growth, stickier US inflation, bigger Treasury supply, or simply a Bank of Canada that cannot keep pace with the higher-for-longer mood in the US. 

I do not think we need to overcomplicate it. The simplest read is this: US rates are rising because the market still sees a tougher inflation and growth mix there, while Canadian data are soft enough to limit how far Canadian yields can follow.

That is also why the recent USD/CAD rally deserves respect until the spread stops widening. If the yield gap keeps expanding, the pair can stay bid even when it looks technically stretched.

So even if we retrace here – which should weaken the dollar and strengthen CAD, therefore USDCAD moves lower – the overall trajectory for USDCAD is still posited to the upside. 

Watch how the spreads react when they return into that orange band, which is the 20W-EMA with 1 standard deviation.

What would change the view?The main near-term risk to the thesis is a softer-than-expected US CPI print this Wednesday.

If inflation cools and Treasury yields back off, part of the dollar’s current support could fade quickly.

On the Canadian side, a surprise rebound in domestic data or a much more hawkish tone from the Bank of Canada later this month would also weaken the argument.

For now though, the balance still favours the upside. USD/CAD is not only breaking higher because the dollar is strong. It is climbing because Canada looks less able to live with the kind of long-end repricing now visible in the United States.

The USD/CAD rally is showing signs of exhaustion after five consecutive weeks of Canadian dollar weakness, despite deteriorating employment data and fading BoC rate hike expectations. Rising speculative CAD longs also suggest some traders are positioning for a recovery. Yet with the Australian dollar and British pound showing greater strength against the Loonie, CAD bears may find better opportunities elsewhere.

View related analysis:

Swissy Attracts Safe-Haven Bets, AUD Shorts Surge to Record High| COT report AUD/USD Q4 Outlook: RBA and Fed Hikes Set the Tone Gold Bears Approach Major Support, USD/CHF Eyes Reversal How to Read the COT Report to Track Forex Market Sentiment USD/CAD Pullback Risks Build as AUD and GBP Target Further CAD Weakness A weak Canadian employment report weighed further on BoC hike expectations, although they were already looking pretty bleak. The OIS curve peaked on September 11 as traders spent the preceding weeks pricing in 75bp of hikes over the following year. Since then, expectations have shifted firmly lower as markets increasingly expect the BoC to keep rates at 2.25% for longer and delay its tightening cycle further — assuming the case for additional hikes does not fade altogether.

The contrast with the US is becoming increasingly clear. The 3-month US OIS (blue) remains anchored near the Fed target, suggesting traders are not banking on an imminent hike, although the 6-month rate is curling higher to reveal a slight hawkish bias. Meanwhile, Canada’s 3- and 6-month OIS rates (green) are moving back towards the BoC cash rate as traders unwind previous hike bets. That relative shift should be supportive of USD/CAD, although its failure to extend the rally despite the widening policy divergence warrants a closer look.

Source: LSEG

Canadian Employment Falls for a Second Month Employment contracted for a second month, with September’s 68.3k decline taking the two-month total to around 110k jobs lost. Just over half of the latest decline came from full-time employment, while the unemployment rate rose to 6.5%. That remains just below its long-term average of 6.58%, but is now comfortably above its five-year average of 6%.

USD/CAD Futures Positioning | COT Report What makes the Canadian dollar futures selloff interesting over the past few weeks is that it has coincided with a sharp rise in gross longs. The combined bullish exposure of large speculators and asset managers is 189k contracts, although rising shorts have kept both groups net short overall.

However, note that a small doji formed on the CAD futures chart despite weak employment data and fading BoC hike expectations. If a market cannot fall on bad news, it stands a greater chance of rising on good news.

That said, there is little in the way of market-moving data on Canada’s economic calendar this week, so the next move may come down to US data, Kevin Warsh’s Fed speech or comments from BoC Governor Macklem on Friday.

Source: CFTC (COT), CME, LSEG

USD/CAD Drivers to Watch This Week Manufacturing/wholesale activity data for confirmation that domestic momentum is weakening further. Oil prices, because Canada is a major crude exporter and CAD can get conflicting signals from weaker domestic growth versus higher oil. US CPI and retail sales, because those can move USD/CAD heavily through the USD side and alter relative Fed/BoC pricing. Any comments from Governor Macklem that addresses whether the labour deterioration changes the Bank’s assessment of excess demand and inflation persistence.

This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of FOREX.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.

Canadian Dollar Mixed Against FX Majors With a stretched US dollar and mixed performance across FX majors, two of the better opportunities for CAD traders may be against the Australian dollar and British pound.

Source: ICE, TradingView

The weekly chart shows a small doji on CAD/USD after a five-week selloff. Given it closed flat despite weak data from Canada, it is a minor sign of strength. USD/CAD bulls may want to tread with caution, as the risk of a pullback could be building. The Australian dollar tested parity against the Canadian dollar last month, and it looks like it wants to have another go. The CAD/AUD chart shows a bearish consolidation within an established downtrend, and with a shooting star candle forming two weeks ago, perhaps we’ve seen the swing high — and a bearish breakout could be pending. The British pound is also performing well against the Loonie, with GBP/CAD having broken out of a bullish retracement channel two weeks ago.

Canadian Dollar Technical Outlook: USD/CAD Multi-Timeframe Analysis
The USD/CAD rally has reached five straight weekly gains, stalling at the 61.8% retracement of the 2025 decline as a tight trading range forms. Michael Boutros, StoneX Media Senior Market Analyst, walks through USD/CAD on the weekly, daily and four hour charts and sets out the data calendar ahead. Only three of the last 21 sessions have closed lower, and momentum remains overbought inside an ascending pitchfork, with a break of trendline support marking the risk of a larger correction. Fed funds futures have priced out a Federal Reserve rate hike this month while still pricing roughly 86% odds of another increase in December. Canadian employment data, the University of Michigan consumer survey and the U.S. consumer price index are next for the Canadian dollar.

This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.

Key USD/CAD Economic Data Releases

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--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

The US dollar rally has finally lost some momentum after three strong weeks, allowing USD/CAD to retreat from its cycle high. Softer US data, reduced Fed hike bets and easing Treasury yields have weighed on the greenback, while a strong Canadian trade surplus and the prospect of firmer crude oil add to the case for a near-term USD/CAD pullback.

View related analysis:

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USD/CAD Retreats as the US Dollar Rally Loses Momentum
A weak payrolls report and slightly softer headline ISM services print helped the US dollar index retreat further from Monday’s cycle high, as Fed hike bets were scaled back. The bond-market selloff also stabilised to pull Treasury yields a touch lower, though they remain firmly elevated. Trade data showed imports surged 4.3% to a record $420.8 billion, widening the deficit to $105.6 billion and building the case for weaker growth.

A firmer euro also contributed to US dollar weakness, with bets of an ECB hike in December rising to 80%. French bond yields also pulled back from their highs as bond-market stress eased.

The weaker US dollar helped USD/CAD pull back from arguably stretched highs, aided by an unexpectedly strong Canadian trade surplus. Commodity FX was higher in general, with NZD/USD the strongest FX major and AUD/USD rising for a third day, in line with my near-term bias. It seems markets are taking advantage of the minor reprieve from the US dollar rally, while risk appetite on Wall Street amid earnings optimism also helped.

US Dollar Index (DXY) Technical Analysis
We have just witnessed the strongest three-week rally for the US dollar index since November, but with resistance on hand, a pause in the trend – if not a pullback – is arguably due. The fact that payrolls undermined the rally strengthens the case for momentum to lose steam over the near term.

DXY Weekly Chart Points to a Pause
We’re not even halfway through the week, but DXY is on track for a bearish pinbar should it close around current levels or lower by Friday. Note that prices are back below the May high, while this week’s high has so far respected the upper trend-channel resistance and has not yet managed to test the 50% retracement level between the January 2025 high and January 2026 low. The weekly RSI (2) was also heavily overbought last week.

The daily chart shows a small bearish engulfing candle formed on Tuesday, following a wide-bodied shooting star on Monday. A bearish divergence also formed on the daily RSI (2) within the overbought zone, while RSI (14) is now curling lower from its own overbought zone.

US Dollar Pullback Could Remain Shallow
None of this points to a sharp pullback at this stage, and we should keep in mind the strength of the three-week rally that took us to these levels. But with a lack of top-tier data aside from the FOMC minutes, we could now find volatility across FX majors remains on the lower side while a shallow pullback plays out on DXY.

Source: ICE, TradingView

USD/CAD Technical Analysis: US Dollar vs Canadian Dollar
Widening yield differentials between the US and Canada helped USD/CAD enjoy its best three-week rally since December 2024. With the US-Canada 2-year spread remaining pinned near cycle highs, I am not on guard for a deep pullback on USD/CAD.

But given the rally has stalled around the June high, with a shooting star candle followed by bearish range expansion, perhaps a pullback to the 10-day EMA at a minimum is due. And like the US dollar index, the daily RSI (2) on USD/CAD formed a bearish divergence within its overbought zone, while RSI (14) is curling lower from its own overbought zone.

Crude Oil Bounce Could Deepen the USD/CAD Pullback
The 4-hour chart shows support has been found around its 50-bar EMA and weekly pivot point, while RSI (2) is heavily oversold. Perhaps bears may be seeking to fade into moves towards the June high and maintain a near-term bearish bias while USD/CAD remains beneath Monday’s high.

Note the Brent futures chart I have overlaid is inverted, as it tends to correlate positively with USD/CAD. So if oil prices bounce – which I have a hunch they may – it could build the case for a slightly deeper pullback in USD/CAD over the near term.

Source: ICE, TradingView

The trading week continues to unfold, and the Canadian dollar has begun to show signs of renewed strength in the short term. This can be seen in recent USD/CAD price action, with the pair posting a decline of roughly 0.2% over the last two sessions, allowing the Canadian currency to recover part of the ground lost in previous weeks.

However, this move is still not enough to confirm a consistent shift in market direction. For now, it appears to be driven more by a temporary loss of momentum in the U.S. dollar than by a structural recovery in the Canadian dollar. As a result, a phase of indecision is beginning to develop and could remain relevant for USD/CAD price action over the coming sessions.

Is the USD Beginning to Lose Momentum?
Several sessions have passed since the release of the latest U.S. NFP figures at the end of last week. One of the main consequences of the report was a temporary reduction in expectations for higher interest rates ahead of the Federal Reserve's October meeting.

The slowdown observed in labor market conditions reduced part of the room available for a more aggressive Fed in the short term, a development that is already reflected in monetary-policy probabilities. According to CME Group, markets are currently pricing in more than an 80% probability that interest rates will remain unchanged at the October 28 meeting, keeping the benchmark rate at 4.00%. Expectations of a more patient Federal Reserve have become increasingly evident since the employment data was released.

Source: CMEGROUP

The most visible consequence of this shift in expectations has been a partial loss of momentum in the U.S. dollar. Part of this dynamic is linked to a recent moderation in U.S. Treasury yields, with the 10-year rate moving away from the recent highs observed above 5.3%.

At the same time, this moderation has also started to appear in the behavior of the DXY, the index that measures U.S. dollar strength against its main rivals. After approaching the 102-point area, the index has moved back toward the 101-point zone, reflecting a loss of momentum that coincides with expectations of a less aggressive Federal Reserve in the near term.

Source: TradingEconomics

This dynamic remains particularly important because a moderation in bond yields could also begin to reduce part of the relative attractiveness of U.S. assets. A smaller yield advantage may temporarily slow capital inflows into the United States and limit some of the demand supporting the dollar.

This is precisely the environment that has allowed the Canadian dollar to recover some ground over recent sessions and could continue to support a broader phase of indecision around USD/CAD. However, it is also important to remember that the interest-rate differential continues to favor the United States by a considerable margin. Because of this, the Canadian dollar still carries several weeks of weakness within its medium-term outlook, and any signal suggesting that the Federal Reserve could once again adopt a more aggressive stance may restore strength to the U.S. dollar and could revive the buying pressure that has dominated much of USD/CAD's recent price action.

What About the Trade War?
Another factor that remains relevant for the Canadian dollar is the trade relationship between Canada and the United States.

Significant tariff measures continue to remain in place between both countries. The United States maintains tariffs of up to 50% on certain Canadian goods and, since late September, additional restrictions have also been imposed on selected imports. Canada, meanwhile, continues to apply retaliatory tariffs ranging between 15% and 50% on certain U.S. products.

This situation continues to reflect an environment of trade tension that could affect the region's economic outlook over the coming months.

What stands out is that during the G20 trade ministers' meetings held in October, U.S. representatives indicated that several important issues with Canada remain unresolved. This suggests that, at least in the short term, the economic dispute remains far from a definitive resolution and that negotiations continue to progress slowly.

Although this issue has received less attention than central banks and bond markets in recent weeks, it remains an important consideration for Canada due to its heavy dependence on trade with the United States. More than 70% of Canadian exports are destined for the U.S. market and, if trade tensions continue, they could begin to weigh on Canada's growth outlook over the coming months.

For this reason, unless meaningful diplomatic progress begins to emerge, the trade conflict may continue to represent an obstacle to a stronger recovery in the Canadian dollar. Under this scenario, the situation could continue to favor buying pressure around USD/CAD in the weeks ahead.

USD/CAD Technical Forecast

Source: StoneX, Tradingview

The aggressive uptrend is entering a risk zone: USD/CAD price action continues to reflect a dominant bullish bias developed over recent weeks. This dynamic has helped establish a short-term bullish trendline that continues to guide much of the pair's movement. However, the recent bearish corrections are beginning to place that structure under pressure. If buyers fail to regain momentum above key technical barriers, a broader phase of indecision could begin to develop over the coming weeks.

 
MACD: The MACD histogram continues to show a gradual slowdown and is moving closer to the 0 neutral line. This reading reflects fading momentum within short-term moving averages and supports the possibility of a more consistent phase of neutrality developing around USD/CAD.

 
RSI: The RSI also continues to flatten in recent sessions, signaling that the dominance of bullish momentum has begun to moderate. Nevertheless, the indicator remains close to the 70 overbought threshold, a situation that continues to highlight the excess buying pressure accumulated in previous weeks and leaves room for additional short-term corrective declines.

 
Key Levels:

1.42355 – Key Resistance: The last major barrier observed in recent months and a high not seen since June of this year. Price action that manages to consolidate above this level would not only reinforce the current bullish bias but could also begin to establish a more consistent higher-high structure on the daily chart, opening the door to a broader uptrend.

 
1.41564 – Near-Term Barrier: An important retracement level observed several weeks ago that now stands as the closest support area to monitor. This reference could become the primary level to watch if recent bearish corrections continue to extend.

 
1.40526 – Critical Support: An important equilibrium zone established during previous weeks that remains the most significant downside barrier within the current structure. Moves toward this level could begin to reflect a more evident loss of direction, place the current uptrend at risk, and open the door to a broader phase of indecision that could eventually evolve into a more established trading range.

 
Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

TL;DR: USD/CAD has rallied from 1.3730 to 1.4292, stalling right at the 61.8% retracement (1.4290) of the 1.4791–1.3480 decline, with Wednesday’s FOMC minutes and Friday’s Canadian jobs report now standing directly in front of the next directional break.

USD/CAD Reaches a Major Medium-Term Barrier USD/CAD has rallied strongly over the past month and is now testing a technically important level. The pair advanced from 1.3730 to 1.4292, clearing the June high at 1.4247 before stalling around the 61.8% retracement of the 1.4791 to 1.3480 decline at 1.4290.

That makes the next move consequential. A firm break above 1.4290/1.4292 would argue that the rally from 1.3480 is extending into a larger medium-term advance, with 1.4497 as the next projection target and the 1.4791 high potentially coming back into view. Momentum is stretched, but there is still no clear evidence that a top has formed.

Two events now sit directly in front of this technical test: Wednesday’s FOMC minutes and Friday’s Canadian employment report.

Rates, Not Oil, Drove the Rally The rise in USD/CAD has been primarily a Dollar and yield-differential story, rather than an oil story. Brent remains around $100, yet the Canadian Dollar has received little support from elevated crude prices.

Instead, US yields have risen much more sharply than Canadian yields. The US 10-year is around 5.32%, compared with roughly 3.95% for Canada. Based on the one-month yield moves, the differential has widened from about 97bp to 137bp, with roughly 56bp of the increase coming from the US side versus around 16bp in Canada.

There is an important nuance in the latest US move. Over the past week, the US 2-year yield has fallen by around 9bp while the 10-year has risen by roughly 9bp. That steepening suggests the latest rise in long yields reflects term-premium pressure more than renewed near-term Fed hike pricing.

FOMC Minutes: More Likely to Drive Volatility Than Rewrite the Trend The Fed held rates at 3.75–4.00% in September, while the median dot sits around 4.1%. Markets, however, are pricing a considerably higher eventual path, at roughly 4.70% by late 2027. October hike odds are only around 18–19%, following weak September payrolls and softer wage growth. That creates an asymmetric setup for Wednesday’s minutes.

A hawkish tone would mostly reinforce what markets already expect: inflation remains a concern and further tightening is still possible. The larger surprise would be a more restrained message consistent with one more hike followed by a pause. Given how much tightening is already embedded farther out in the curve, that could pull US yields lower and provide the cleaner catalyst for a USD/CAD retreat.

The minutes are also backward-looking. They cover the September 15–16 meeting, before markets absorbed the subsequent deterioration in US employment data. Their ability to change the trend may therefore be limited unless they materially alter expectations for the eventual policy plateau.

Canada Jobs Could Decide Whether 1.4290 Breaks Friday’s Canadian employment report may provide the more direct test of the Canadian Dollar. August employment fell 41.7k, wage growth slowed to 2.0%, and unemployment held at 6.4%. Consensus for September is around +6k, with unemployment expected to rise to 6.5%.

The Labour Force Survey is volatile, so a rebound following August’s decline would not be surprising. That makes the result particularly important around current technical resistance.

Another negative employment print combined with unemployment at 6.6% or above would strengthen the case for a sustained break above 1.4290. A much stronger outcome, around +30k or more with unemployment near 6.3%, would provide a clearer catalyst for Canadian Dollar recovery and increase the risk of a USD/CAD pullback. A result close to consensus would leave the pair caught between 1.4290 and 1.4200, with US yields likely to remain the dominant driver. ActionForex’s Technical View on USD/CAD The daily chart is stretched. RSI is near 78, but daily MACD remains positive and has not produced a clear bearish divergence. That argues against treating overbought conditions alone as evidence of a reversal.

The H4 chart is more cautious. MACD has developed bearish divergence, showing that upside momentum is fading as price tests 1.4290/1.4292.

The first meaningful downside confirmation would be a sustained break or H4 close below 1.4200. That would suggest a short-term top has formed at 1.4292 and bring a pull-back to the 55-period H4 EMA, currently around 1.4179, and below. A deeper pullback could then extend toward 1.4077, the 38.2% retracement of the 1.3730 to 1.4292 rally. Strong support is expected from there to contain downside and set the range for consolidation, forming the base for another leg up at a later stage.

Meanwhile, a firm break of 1.4290/1.4292 will extend the recent rise to the 100% projection of 1.3480 to 1.4247 from 1.3730 at 1.4497. Clearing 1.4290 cleanly will also set the stage for a retest of the 1.4791 high in the medium term.

Level Significance 1.4290/1.4292 61.8% retracement and breakout trigger 1.4497 Next upside projection 1.4200 First short-term topping trigger 1.4077 Key corrective support 1.4791 Medium-term upside reference Minutes First, Jobs Second The bias remains upward while USD/CAD holds above 1.4200, but the pair is now testing a level important enough to demand confirmation in either direction.

A firm break above 1.4290/1.4292 would extend the rally toward 1.4497 and strengthen the medium-term case for a retest of 1.4791. A sustained break below 1.4200 would instead confirm that momentum has finally rolled over and open a corrective move toward 1.4077.

The FOMC minutes test the Dollar side first. Canada’s jobs report then tests the Canadian side. USD/CAD is stretched, but not yet topping. The next confirmed break decides whether the rally accelerates or finally consolidates.

Key Takeaways USD/CAD is testing 1.4290/1.4292, the 61.8% retracement of the 1.4791–1.3480 decline, after rallying from 1.3730 largely on a widening US-Canada yield differential rather than oil. Wednesday’s FOMC minutes cover a meeting that predates the recent weak US jobs data; a more restrained tone than markets currently price offers the cleaner catalyst for a pullback. Friday’s Canadian employment report is the more direct test of the Loonie—a weak print (unemployment at 6.6%+) favors a break above 1.4290, while a strong rebound (+30k or more) favors a pullback. H4 momentum shows bearish divergence even as the daily chart stays constructive, making a close below 1.4200 the key signal that a short-term top has formed. A firm break above 1.4290/1.4292 opens 1.4497 and keeps a retest of the 1.4791 high in play; a break below 1.4200 opens a corrective move toward 1.4077.

ActionForex

ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.

The Canadian dollar continues to face one of its most challenging environments in recent months when it comes to maintaining strength against the U.S. dollar. The weakness of the Canadian currency is clearly reflected in USD/CAD, which has now recorded nine consecutive bullish sessions and gained more than 1.7% during that period. This price action highlights that buying pressure remains firmly in control of the pair in the short term.

For now, the primary driver behind this move continues to be the strength of the U.S. bond market, which remains supportive of dollar demand. As long as this backdrop persists, and even if it proves resilient to tomorrow's U.S. employment data release, buying pressure around USD/CAD could remain an important feature of the market in the sessions ahead.

Can Anything Slow the Bond Market Rally?
As trading continues, a similar trend remains visible across both Canadian and U.S. bond markets. Ten-year government bond yields in both countries have moved higher in recent weeks, although the gap between them remains substantial.

While U.S. 10-year Treasury yields continue to trade near 5.2%, Canadian government bond yields remain close to the 4.0% area. This spread continues to provide a meaningful advantage for U.S. assets, particularly given that Treasury bonds are perceived as lower-risk investments while also offering higher returns. As a result, U.S. dollar-denominated assets continue to enjoy a stronger relative appeal among international investors.

Source: TradingEconomics

This dynamic has been a consistent theme for several weeks and helps explain part of the weakness observed in the Canadian dollar. Even so, it is worth noting that this trend could begin to shift depending on expectations surrounding the Federal Reserve, which is precisely why tomorrow's NFP release has become such an important event.

The employment report will provide a clearer picture of labor market conditions during September and could directly influence expectations for future U.S. monetary policy. Markets currently expect approximately 90,000 jobs to have been added, compared with 162,000 in the previous report. This anticipated slowdown is important because it could begin to reduce the scope for a more aggressive Federal Reserve.

In fact, if payroll growth comes in below expectations, it could further reduce the likelihood of additional rate hikes over the coming months. This cautious outlook is already beginning to appear in market pricing, where current probabilities suggest nearly a 70% chance that interest rates will remain unchanged at the October meeting. Nevertheless, those expectations remain highly sensitive to tomorrow's employment data.

Source: CMEGROUP

With all of this in mind, the NFP release stands out as one of the most important short-term events for USD/CAD. If the report confirms a slowdown in labor market conditions and reinforces the idea of a more patient Federal Reserve, some of the recent strength in U.S. Treasury yields could begin to moderate, potentially limiting further gains in the U.S. dollar. Under that scenario, a more balanced environment could begin to develop around USD/CAD.

That said, the opposite outcome remains equally important. If employment data once again points to a resilient U.S. economy, it could continue to support expectations of restrictive monetary policy for longer. In that case, both Treasury yields and the U.S. dollar could maintain part of their current strength, allowing the buying pressure that has characterized USD/CAD in recent weeks to remain a relevant theme.

USD/CAD Technical Forecast

Source: StoneX, Tradingview

The bullish trend remains dominant: USD/CAD price action continues to reflect a clearly dominant bullish bias. This dynamic has helped establish a short-term uptrend that continues to guide most of the pair's recent movements. However, it is also important to note that the market is approaching key resistance levels and that the recent advance has been relatively rapid, a situation that could begin to signal overstretched bullish momentum and leave room for temporary corrective pullbacks.

 
MACD: The MACD histogram continues to trade above the 0 neutral line, reflecting that the average strength of short-term moving averages remains supportive of a bullish outlook. As long as this behavior persists, buying pressure may continue to dominate the chart.

 
RSI: A similar picture can be observed in the RSI, which continues to develop above the 50 neutral level. However, the indicator has also moved beyond the 70 overbought threshold, a signal that is often associated with excessive recent buying momentum and could open the door to short-term corrective declines.

 
Key Levels:

1.42348 – Key Resistance: The last major barrier observed in recent months and a high not seen since July. A sustained move above this level would not only reinforce the dominance of the current bullish bias but could also confirm a more consistent higher-high structure on the daily chart. Such a scenario could pave the way for a broader and more meaningful uptrend in the weeks ahead.

 
1.41564 – Near-Term Barrier: A significant retracement level observed several weeks ago that now stands as the closest support reference to monitor. This area could become the primary level to watch in the event of short-term corrective pullbacks.

 
1.40526 – Critical Support: An important equilibrium zone observed during previous weeks that remains the most relevant downside barrier within the pair's recent price action. A move toward this level could begin to signal a loss of directional momentum, place the current uptrend under pressure, and open the door to a broader phase of indecision over the coming weeks.

 
Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

Key Highlights

USD/CAD started a steady increase and traded above 1.4150. A bullish trend line is forming with support at 1.4165 on the 4-hour chart. Bitcoin remained supported and might attempt a fresh increase above $85,500. The US GDP could grow 1.5% in Q2 2026 (Preliminary). USD/CAD Technical Analysis The US Dollar gained bullish momentum above 1.3950 against the Canadian Dollar. USD/CAD rallied above the 1.4000 and 1.4120 resistance levels.

Looking at the 4-hour chart, the pair settled well above 1.4000, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair even tested the 1.4200 resistance.

If the bulls remain in action, the pair could rise further toward the 1.4240 level. The first major resistance might be 1.4265. A close above the 1.4265 resistance could spark another upward movement.

In the stated case, the bulls could aim for a move to 1.4350. If there is a downside correction, the pair might find bids near a bullish trend line at 1.4165.

The first major support might be 1.4100. A close below 1.4100 might accelerate the decline. In the stated case, the bears could aim for a move to 1.3980 and the 100 simple moving average (red, 4-hour).

Looking at Bitcoin, the bulls are still in action above $80,000, and they might aim for a fresh move toward the $86,500 resistance.

Upcoming Key Economic Events:

US ADP Employment Change for Sep 2026 – Forecast 72K, versus 38K previous. US Gross Domestic Product for Q2 2026 (Preliminary) – Forecast 1.5% versus previous 1.5%.

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Key Points:EUR/USD is losing some ground as traders focus on the situation in debt markets. USD/CAD tested new highs amid sell-off in precious metals markets. USD/JPY climbed back above the 157.00 level.

U.S. Dollar Gains Some Ground As Treasury Yields Test New Highs

DXY 280926 4h Chart U.S. Dollar Index moved away from session highs as oil prices pulled back amid reports indicating that Saudi Arabia restarted the key East-West pipeline.

Rising Treasury yields served as the key catalyst for the forex market in today’s trading session. The yield of 2-year Treasuries climbed above the 4.92% level, while the yield of 10-year Treasuries settled near 5.25%.

Traders also had a chance to take a look at the Dallas Fed Manufacturing Index report. The report indicated that Dallas Fed Manufacturing Index declined from 11.6 in August to 9.8 in September, compared to analyst forecast of 1.

In case U.S. Dollar Index stays above the 101.00 level, it will head towards the next resistance level, which is located in the 101.50 – 101.65 range. A successful test of this level will open the way to the test of the next resistance at 102.35 – 102.50.

EUR/USD Attempts To Rebound From Multi-Week Lows

EUR/USD 280926 4h Chart EUR/USD is losing ground as traders focus on the sell-off in global bond markets. In the EU, Germany’s 10-year bond yield reached the highest level since 2009.

The nearest support level for EUR/USD is located in the 1.1335 – 1.1350 range. In case EUR/USD manages to settle below the 1.1335 level, it will head towards the next support, which is located in the 1.1250 – 1.1265 range.

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GBP/USD Gains Ground As Healey Promises Fiscal Discipline

GBP/USD 280926 4h Chart GBP/USD is moving higher as Chancellor John Healey promised fiscal discipline ahead of his debut budget, which would be released on October 28.

GBP/USD is heading towards the resistance level at 1.3285 – 1.3300. If GBP/USD climbs above the 1.3300 level, it will get to the test of the 50 MA at 1.3318. A move above the 50 MA will open the way to the test of the next resistance level at 1.3400 – 1.3415.

USD/CAD Tests New Highs

USD/CAD 280926 4h Chart USD/CAD continues to move higher as traders react to the strong sell-off in precious metals markets. Gold is down by -3.6%, while silver pulled back by almost 5%.

From the technical point of view, USD/CAD climbed above the resistance level at 1.4135 – 1.4150 and is trying to settle above the 1.4170 level. In case this attempt is successful, USD/CAD will head towards the next resistance, which is located in the 1.4235 – 1.4250 range.

USD/JPY Tests The 50 MA At 157.28

USD/JPY 280926 4h Chart USD/JPY is mostly flat as traders are evaluating their next moves amid global bond market sell-off. The magnitude of the sell-off has left traders wondering what to do next.

Currently, USD/JPY is trying to settle above the 50 MA at 157.28. In case this attempt is successful, USD/JPY will head towards the resistance level at 158.00 – 158.50. A move above the 158.50 level will open the way to the test of the next resistance at 160.00 – 160.50. It remains to be seen whether BoJ would be ready to intervene in case USD/JPY climbs above the psychologically important 160.00 level.

On the support side, a move below the 157.00 level will push USD/JPY towards the nearest support at 155.00 – 155.50.

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About the Author

Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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The final stretch of 2026 is approaching, and North America's major currencies have begun to show a shift in the strength dynamics seen earlier in the year. New expectations of a more aggressive monetary policy stance, particularly in the United States, could be significantly reshaping the outlook for the region. At the same time, this backdrop, combined with potential trade tensions across North America, may become one of the most important drivers of currency performance in the months ahead.

In this environment, both the Canadian dollar and the Mexican peso continue to show difficulties in consistently recovering against a U.S. dollar that has regained strength, particularly after the recent shift in expectations surrounding the Federal Reserve. If confidence in the USD remains resilient through the final part of the year, both USD/CAD and USD/MXN could continue to reflect a meaningful degree of indecision or even develop more sustained bullish pressure during the months ahead.

Are North America's Central Banks Moving in Different Directions?
As this article is being written, North America's central banks continue to follow different monetary policy paths. For now, Banco de México still maintains the highest interest rate in the region at 6.5%, although it has already reduced the benchmark from the 7.00% level seen at the beginning of the year. The institution continues to adopt a cautious approach while evaluating incoming economic data, supporting a relatively neutral outlook for the coming months.

Bank of Canada, meanwhile, remains the institution that has made the fewest changes compared with its regional peers. It has not adjusted interest rates since October 2025, leaving the policy rate unchanged at 2.25%, the lowest level in North America. This reflects a wait-and-see strategy as policymakers continue to assess economic conditions before making any new adjustments.

The Federal Reserve, by contrast, has begun to reshape the regional landscape. It is currently the only central bank that has resumed raising interest rates, moving the benchmark rate from 3.75% to 4.00%. In addition, the institution has started to signal a more aggressive stance for the months ahead, a dynamic that could continue to support the U.S. dollar against its regional counterparts.

North America Interest Rates Table 2025–2026

Color scale: Green to red. Green represents higher interest rates, while red represents lower rates in each country.

Source: Data - Tradingeconomics

North America Interest Rates Chart 2025–2026

Source: Tradingeconomics

The contrast between the three institutions becomes clear when looking at the evolution of interest rates over recent months. Mexico continues to maintain the highest policy rate in the region, the Bank of Canada the lowest, while the Federal Reserve stands out as the only institution that has resumed rate hikes during 2026. These differences not only reflect distinct rate levels but also monetary policy approaches that are becoming increasingly divergent across the three economies. These differences are also evident in the most recent communications from each central bank:

During its latest meeting, the Bank of Canada left rates unchanged at 2.25% on September 2. Although policymakers continue to acknowledge upside inflation risks, they made it clear that they are not yet prepared to begin a new tightening cycle, meaning any future adjustments will remain data dependent.

 
Banco de México's most recent decision took place on August 6 and concluded with rates unchanged at 6.5%. While the prolonged easing cycle appears to have come to an end, the institution continues to stress that rate hikes are not part of its base-case scenario, maintaining a prudent stance while assessing inflation trends.

 
In contrast, the Federal Reserve raised rates to 4.00% during its September 16 meeting. Policymakers highlighted the strength of economic activity and the labor market, while inflation continues to show insufficient signs of slowing, leaving the door open to further rate increases.

 
With that in mind, inflation remains one of the most important drivers of monetary policy decisions across the region. In Canada, inflation has eased to the 3.0% area from 3.2% in May. Although still above the 2.00% target, price pressures continue to moderate gradually. In Mexico, inflation slowed to 3.26% in August, making it the economy that has shown the clearest signs of disinflation across North America. In the United States, however, inflation remains near 3.4% after reaching a peak of 4.2% in May, still well above the Federal Reserve's 2.00% objective.

North America Inflation Trends 2025–2026

Source: Tradingeconomics

These figures paint a mixed picture. Mexico continues to display a more pronounced moderation in inflationary pressures, while Canada and especially the United States are still dealing with more persistent price pressures. This distinction is significant because it helps explain why markets are beginning to price in a more aggressive path for the Federal Reserve, supported both by recent comments from policymakers and by inflation data that has yet to show sustained improvement. Meanwhile, both Banxico and the Bank of Canada appear to have greater room to maintain cautious policy approaches in the months ahead.

Taken together, the differences that have started to emerge among North America's central banks could become one of the most important drivers of currency performance through the final months of 2026. While the Federal Reserve is moving toward a more restrictive stance supported by inflation that continues to show resilience, both Banxico and the Bank of Canada are maintaining more cautious approaches, aided by greater relative stability in their inflation trends. This divergence could begin to alter the balance of strength that prevailed throughout much of the year and restore some momentum to the U.S. dollar within the region, particularly if expectations for higher interest rates continue to build in the months ahead. Under this backdrop, the Mexican peso could begin to lose part of the advantage derived from its interest rate differential, while the Canadian dollar may continue to face challenges against a U.S. market supported by higher bond yields and the dollar's traditional role as a safe-haven asset. As a result, both USD/CAD and USD/MXN could begin to develop periods of greater indecision or even more sustained buying pressure over the coming months.

Has the Trade War Made a Comeback?
As 2026 draws to a close, one of the developments regaining attention is the growing trade dispute between the United States and Canada. On July 20, the United States announced tariffs of up to 50% on selected Canadian products and, following the collapse of negotiations, those measures took effect on August 22. In response, Canada imposed retaliatory measures on approximately CAD 27 billion worth of U.S. goods, including tariffs that also reach 50%.

Tensions escalated again on September 8, when the new Canadian measures officially came into force and the United States announced potential import restrictions on selected Canadian products. This measure, which would go beyond traditional tariffs, is expected to take effect on September 29.

Against this backdrop, sentiment toward the Canadian dollar has started to weaken. Not only has there been little progress toward a resolution, but the dispute could also begin to undermine perceptions of Canada's economic stability. This impact can be observed in the CXY, the index that measures the average strength of the Canadian dollar, where several episodes of trade escalation have coincided with declines in the indicator. Moreover, the currency has struggled to regain the highs seen months ago near the 72-point level, suggesting that the trade conflict is having a meaningful impact on demand for CAD beyond monetary policy considerations.

Source: Data TVC - Tradingview

This situation could also extend some of its effects to Mexico over the coming months. The dispute increases the risk that the United States adopts a tougher stance during the review of the USMCA, creating additional uncertainty around regional trade. In addition, Mexico is participating in discussions involving some of the sectors currently at the center of the dispute with Canada, meaning it cannot be ruled out that similar pressures could eventually emerge for Mexico as well. Under that scenario, the review of the trade agreement could increase the risk premium attached to both CAD and MXN.

As a result, while the recent escalation helps explain part of the weakness observed in the Canadian dollar, it also leaves the door open to indirect effects on Mexico. Unless meaningful diplomatic progress or stronger trade agreements emerge, a sense of caution may continue to dominate sentiment around USD/MXN. At the same time, with Canada being the primary target of the current measures, the dispute could continue to support more sustained buying pressure around USD/CAD in the months ahead.

USD/CAD Shows Signs of Growing Indecision

Source: StoneX, Tradingview

A Potential Trading Range Emerges: Price action in USD/CAD over recent months has started to reflect a lack of clear direction on the weekly chart. So far, the pair has been unable to develop a meaningful trend and has instead continued to trade within a broad range that contains most of the recent price activity. If prices remain within this structure, it may be difficult to see the beginning of a more defined trend, leaving the current range as the most important technical reference for the months ahead.

 
RSI: The RSI continues to trade near the 50 neutral level, a situation that reflects a balance between buying and selling pressure over the past 14 weeks. If this behavior persists, the sense of market indecision is likely to remain a relevant feature of the chart.

 
MACD: A similar scenario can be observed in the MACD, whose histogram continues to fluctuate around the 0 neutral line. This reading also reflects balance in the average strength of moving averages and reinforces the idea of a market that currently lacks a dominant direction.

 
Key Levels:

1.41388: Key resistance level that coincides with the upper boundary of the trading range and the 50% Fibonacci retracement level. Price action that manages to consolidate above this area could begin to favor a more dominant bullish bias and support the development of a more relevant upward structure in the months ahead.

 
1.38670: The midpoint of the chart, which coincides with an important equilibrium zone and the 50-period simple moving average. As long as prices continue to develop near this reference, the current neutral outlook may continue to dominate and reinforce the importance of the existing lateral range.

 
1.35543: Key support level located at the lower boundary of the range and below the chart's most relevant moving averages. Sustained price action below this area could signal a significant break of the current structure and open the door to a more dominant bearish bias over the coming months.

 
USD/MXN Begins to Challenge Its Dominant Downtrend

Source: StoneX, Tradingview

The major trendline enters a risk zone: One of the most relevant features of USD/MXN price action is the broad downtrend that has dominated the pair for several months. However, this structure has started to show signs of exhaustion and is increasingly moving into a risk zone. If selling pressure fails to regain momentum, the prevailing downtrend could lose relevance and give way to a period of greater indecision or even a more pronounced bullish bias in the months ahead.

 
RSI: The RSI continues to fluctuate around the 50 neutral level, reflecting a balance between buyers and sellers. This reading supports the possibility that the market may continue moving through a period of uncertainty and limited directional conviction.

 
MACD: A similar picture can be observed in the MACD, whose histogram remains very close to the 0 level, reflecting balance in moving average momentum and the absence of a dominant trend. As long as this dynamic persists, indecision may continue to play a significant role within the chart.

 
Key Levels:

18.15: Major resistance located near important highs from previous months and also aligned with the 200-period simple moving average. Price action that manages to consolidate above this level could signal the beginning of a more dominant bullish bias and support the formation of a new long-term uptrend.

 
17.60: A nearby barrier that coincides with the 50-period simple moving average and an important retracement zone on the chart. If price continues to trade around this level, a lack of clear direction could remain the dominant theme, potentially increasing the relevance of a broader trading range.

 
16.95: Key support located at the 2026 lows and considered the most important downside barrier on the chart. A sustained break below this level could restore momentum to the bearish bias and extend the downtrend as the dominant market structure over the coming months.

 
Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

Key Points:EUR/USD pulled back as Euro Area Consumer Confidence missed analyst estimates. GBP/USD tested new lows as pullback continued. USD/JPY gained ground, supported by rising Treasury yields.

U.S. Dollar Tests New Highs

DXY 220926 4h Chart U.S. Dollar Index gains ground as traders focus on Trump’s speech at UN General Assembly.  President Trump said that he could make a deal with Iran but would destroy the country in case Iran refused to make a deal.

Brent oil rebounded towards the $100.00 level as oil traders reacted to Trump’s words. The rebound in the oil market raised demand for safe-haven assets, providing support to the American currency.

Hawkish comments from Fed’s Collins provided additional support to U.S. dollar. She noted that she supported the rate hike and warned about inflation risks.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 100.50 – 100.65. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 101.50 – 102.00 range.

EUR/USD Tests Support At 1.1420 – 1.1435

EUR/USD 220926 4h Chart EUR/USD tested new lows as traders focused on the Euro Area Consumer Confidence report. The report showed that Euro Area Consumer Confidence decreased from -15.5 in August to -16.5 in September, compared to analyst forecast of -16.

EUR/USD attempts to settle below the support at 1.1420 – 1.1435. If U.S. Dollar Index manages to settle below the 1.1420 level, it will head towards the next support level, which is located in the 1.1335 – 1.1350 range.

GBP/USD Remains Under Pressure

GBP/USD 220926 4h Chart GBP/USD is under pressure as traders stay bearish amid geopolitical tensions and inflation worries. There are no important economic reports scheduled to be released in the UK today, so traders will stay focused on general market sentiment.

The nearest support level for GBP/USD is located in the 1.3285 – 1.3300 range. If GBP/USD declines below the 1.3285 level, it will head towards the next support at 1.3150 – 1.3165. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

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USD/CAD Tests Resistance At 1.4065 – 1.4080

USD/CAD 220926 4h Chart USD/CAD continues to move higher amid lack of positive catalysts for the Canadian dollar. Other commodity-related currencies are mixed in today’s trading session.

From the technical point of view, USD/CAD attempts to settle above the resistance level at 1.4065 – 1.4080. If USD/CAD manages to settle above the 1.4080 level, it will move towards the next resistance, which is located in the 1.4135 – 1.4150 range.

USD/JPY Moves Higher As Treasury Yields Rise

USD/JPY 220926 4h Chart USD/JPY gains some ground as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed back above the 4.75% level, while the yield of 10-year Treasuries settled near 4.97%. I’d note that the yield of 30-year Treasuries moved above the important 5.30% level, so Bessent’s buybacks have so far failed to push yields lower.

The nearest resistance level for USD/JPY is located in the 158.00 – 158.50 range. A successful test of this level will open the way to the test of the next resistance at 160.00 – 160.50. The key question is whether BoJ is ready to intervene in case USD/JPY climbs above the psychologically important 160.00 level.

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Key Points:EUR/USD found itself under pressure at the start of the week. USD/CAD tested new highs as precious metals markets pulled back. USD/JPY gained ground as traders ignored the pullback in Treasury yields.

U.S. Dollar Moves Higher As Traders Stay Bullish

DXY 210926 4h Chart U.S. Dollar Index gains ground as traders react to Chicago Fed National Activity Index report. The report indicated that Chicago Fed National Activity declined from 0.08 in July to -0.04 in August, compared to analyst forecast of +0.2.

U.S. Dollar index is moving towards the resistance level at 100.50 – 100.65. In case U.S. Dollar Index manages to settle above the 100.65 level, it will head towards the next resistance, which is located in the 101.50 – 101.65 range. RSI is in the moderate territory, so there is enough room to gain momentum in case the right catalysts emerge.

EUR/USD Retreats As Traders Ignore The Pullback In The Oil Markets

EUR/USD 210926 4h Chart EUR/USD is losing ground despite the pullback in the oil markets. WTI oil declined below the $95.00 level, while Brent oil settled below the psychologically important $100.00 level.

If EUR/USD settles below the 1.1450 level, it will head towards the nearest support, which is located in the 1.1420 – 1.1435 range. A move below the 1.1420 level will open the way to the test of the 1.1400 level.

On the upside, EUR/USD needs to settle back above the resistance at 1.1500 – 1.1515. If EUR/USD climbs above the 1.1515 level, it will head towards the 50 MA at 1.1545.

GBP/USD Pulls Back As Traders Bet On Hawkish Fed

GBP/USD 210926 4h Chart GBP/USD is losing some ground as traders focus on general strength of the American currency. There are no important economic reports scheduled to be released today in the UK, so traders will stay focused on general market sentiment.

A move below the 1.3350 level will open the way to the test of the support level at 1.3285 – 1.3300. On the upside, a successful test of the resistance at 1.3400 – 1.3415 will push GBP/USD towards the 50 MA at 1.3457.

USD/CAD Attempts To Settle Above 1.4330

USD/CAD 210926 4h Chart USD/CAD tests new highs as traders focus on the pullback in precious metals markets. Other commodity-related currencies are mostly flat in today’s trading session.

EUR/USD Price Forecast

Every new EUR/USD analysis as it publishes, today's technical signal and key levels, live price — on one page.

See all EUR/USD forecasts From the technical point of view, USD/CAD settled above the resistance level at 1.3985 – 1.4000 and is trying to settle above the 1.4030 level. If USD/CAD climbs above 1.4030, it will move towards the resistance level at 1.4065 – 1.4080. RSI has recently moved into overbought territory, but there is enough room to gain momentum in the near term.

USD/JPY Gains Ground As Rebound Continues

USD/JPY 210926 4h Chart USD/JPY is moving higher as traders ignore the pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 4.74% level, while the yield of 10-year Treasuries settled near 4.96%.

Traders stay focused on the hawkish outlook for Fed policy. FedWatch Tool indicates that there is a 53.1% chance that Fed will raise rates at the next meeting in October.

If USD/JPY settles above the 157.50 level, it will move towards the nearest resistance level at 158.00 – 158.50. A successful test of this level will open the way to the test of the next resistance at 160.00 – 160.50. It remains to be seen whether BoJ is ready to intervene below the 160.00 level.

If you’d like to know more about how to trade forex, please visit our educational area.

Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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Key Points:EUR/USD is moving lower as traders prepare for Fed decision. GBP/USD pulled back as traders reacted to UK inflation data. USD/JPY remained stuck near resistance at 155.00 - 155.50 ahead of Fed decision.

U.S. Dollar Gains Some Ground As Traders Prepare For Fed Decision

DXY 160926 4h Chart U.S. Dollar Index is moving higher as traders wait for Fed Interest Rate Decision, which will be released soon.

FedWatch Tool indicates that there is a 92.7% probability that Fed will raise the federal funds rate by 25 bps.

Today, traders had a chance to take a look at the Retail Sales report for August. The report indicated that Retail Sales increased by +1.2% month-over-month, compared to analyst forecast of +0.8%.

NAHB Housing Market Index declined from 35 in August to 32 in September, compared to analyst consensus of 32. Higher interest rates put pressure on builder sentiment.

The nearest resistance level for U.S. Dollar Index is located in the 99.85 – 100.00 range. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.

EUR/USD Moves Lower As Traders Worry About Hawkish Fed

EUR/USD 160926 4h Chart EUR/USD is losing some ground as traders prepare for Fed decision. In the EU, traders focused on the Euro Area Industrial Production report. The report showed that Euro Area Industrial Production declined by -0.1% month-over-month in July, compared to analyst forecast of -0.2%.

If EUR/USD pulls back below the support level at 1.1500 – 1.1515, it will head towards the next support, which is located in the 1.1420 – 1.1435 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

GBP/USD Tests New Lows After UK Inflation Data

GBP/USD 160926 4h Chart GBP/USD tests new lows as traders bet on hawkish Fed and react to inflation data from the UK.

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See all EUR/USD forecasts UK Inflation Rate increased from 2.9% in July to 3.1% in August, in line with analyst consensus. Core Inflation Rate remained unchanged at 2.6%. The report has also met analyst expectations.

GBP/USD declined below the support at 1.3470 – 1.3485 and is trying to settle below the 1.3450 level. In case this attempt is successful, GBP/USD will head towards the next support at 1.3400 – 1.3415.

USD/CAD Tests New Highs As Traders Stay Bullish

USD/CAD 160926 4h Chart USD/CAD is moving higher despite rising precious metals markets. Other commodity-related currencies are mostly flat in today’s trading session.

USD/CAD moved above the resistance at 1.3900 – 1.3915 and is heading towards the 1.3950 level. A move above 1.3950 will open the way to the test of the resistance at 1.3985 – 1.4000.

USD/JPY Is Stuck Below The 155.50 Level

USD/JPY 160926 4h Chart USD/JPY continues its attempts to settle above the resistance level at 155.00 – 155.50 as traders ignore the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.62% level, while the yield of 10-year Treasuries settled near 4.96%.

If USD/JPY settles above the 155.50 level, it will head towards the resistance level at 158.00 – 158.50. On the support side, a move below the 50 MA at 154.41 will push USD/JPY towards the support level at 152.50 – 153.00. I’d note that USD/JPY will be extremely sensitive to Fed decision and comments from Fed Chair Warsh. In case Fed is less hawkish than expected, USD/JPY may find itself under material pressure.

If you’d like to know more about how to trade forex, please visit our educational area.

Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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The US dollar is consolidating against the yen and Canadian dollar ahead of the key event of the week — the Federal Reserve meeting. The Fed is widely expected to raise its policy rate by 25 basis points to a range of 3.75–4.00%. As this move is already largely priced in, attention will focus on the updated economic projections, dot plot and press conference. Investors will assess whether the September rate hike marks the beginning of a new phase of monetary tightening or whether the central bank will prefer to adopt a wait-and-see approach.

Expectations of a more hawkish Fed are supported by persistent inflationary pressures, recent employment data and rising oil prices. US retail sales data will provide an additional reference point ahead of the meeting. Strong figures could provide further support for the dollar, although the market reaction is likely to remain limited ahead of the Fed decision.

USD/JPY The decline in USD/JPY over the past two weeks has slowed around the key support area of 152.90–153.20. At the start of the week, the price tested this area several times, while buyers managed to establish a foothold above the psychological 155.00 level yesterday. Hawkish Fed rhetoric could support a corrective rise in USD/JPY towards 156.20–157.00. More cautious signals regarding further policy tightening, by contrast, could put renewed pressure on the dollar and lead to another test of the 152.90–153.20 area.

Key events for USD/JPY:

today at 15:30 (GMT+3): US core retail sales; today at 21:00 (GMT+3): US Federal Reserve interest rate decision; today at 21:30 (GMT+3): Federal Open Market Committee press conference.

USD/CAD USD/CAD has recovered from its recent lows and is testing the 1.3895–1.3940 resistance area, despite support for the Canadian dollar from elevated oil prices. A firm move above 1.3940, followed by the level turning into support, could pave the way for a rise towards 1.4000–1.4030. A failed attempt to establish itself above the current resistance area, by contrast, could trigger a renewed decline towards the 1.3760 support level.

Key events for USD/CAD:

today at 15:30 (GMT+3): Canadian building permits; today at 17:30 (GMT+3): US crude oil inventories; today at 18:30 (GMT+3): Federal Reserve Bank of Atlanta GDPNow indicator.

Overall, USD/JPY and USD/CAD remain in consolidation ahead of the key Fed decision. As a 25-basis-point rate hike is already largely priced in, the dollar’s subsequent reaction will depend primarily on the central bank’s projections and rhetoric. Signals pointing to further tightening could support gains in both pairs, while a more cautious Fed stance could put renewed pressure on the US currency.

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Published: Sep 11, 2026, 16:36 GMT+00:00

$1.16013

-0.08%

Key Points:EUR/USD settled near the 1.1600 level as traders reacted to U.S. CPI report. GBP/USD moved higher as UK GDP exceeded analyst estimates. USD/JPY pulled back towards the 153.50 level.

In this article:EUR/USD

-0.08%

EUR/USD ForecastGBP/USD

+0.09%

GBP/USD ForecastUSD/CAD

+0.21%

USD/CAD ForecastUSD/JPY

-0.52%

USD/JPY Forecast

U.S. Dollar Attempts To Gain Ground After CPI Report

DXY 110926 4h Chart U.S. Dollar Index is swinging between gains and losses as traders focus on the CPI report. The report indicated that Inflation Rate remained unchanged at 3.4% in August, in line with analyst estimates. Core Inflation Rate decreased from 2.5% in July to 2.4% in August. The report has also met analyst expectations. I’d note that Core Inflation Rate grew by +0.3% a month-over-month basis, exceeding the analyst forecast of +0.2%.

Traders also focus on the strong pullback in the oil markets. Oil prices are down by -3.5%, which is bearish for U.S. dollar.

In case U.S. Dollar Index settles back above the 50 MA at 99.08, it will head towards the nearest resistance at 99.25 – 99.40. A move above the 99.40 level will open the way to the test of the next resistance at 99.85 – 100.00.

EUR/USD Remains Stuck Near 1.1600 EUR/USD 110926 4h Chart EUR/USD managed to rebound from session lows as traders reacted to U.S. inflation data and evaluated chances for a rate hike at the next Fed meeting. According to FedWatch Tool, the probability of a rate hike has increased to 86.7%.

If EUR/USD settles back above the support level at 1.1600 – 1.1615, it will head towards the resistance at 1.1685 – 1.1700. On the support side, a move below 1.1570 will open the way to the test of the support at 1.1500 – 1.1515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

GBP/USD Moves Higher As UK GDP Exceeds Estimates GBP/USD 110926 4h Chart GBP/USD gains ground as traders focus on GDP report from the UK. The report indicated that GDP increased by +0.4% month-over-month in July, compared to analyst forecast of 0%.

Traders also had a chance to take a look at Industrial Production and Manufacturing Production report. UK Industrial Production increased by +0.2% month-over-month in July, while Manufacturing Production grew by +0.9%. Both reports exceeded analyst estimates.

Currently, GBP/USD is trying to settle above the 50 MA at 1.3524. In case this attempt is successful, GBP/USD will head towards the resistance at 1.3550 – 1.3565. A move above the 1.3565 level will push GBP/USD towards the next resistance at 1.3635 – 1.3650.

USD/CAD Tests New Highs As Rebound Continues

USD/CAD 110926 4h Chart USD/CAD gained ground despite the rebound in precious metals markets. Other commodity-related currencies managed to gain ground in today’s trading session.

USD/CAD climbed above the 1.3850 level and made an attempt to settle above 1.3880. In case USD/CAD climbs above 1.3880, it will move towards the resistance level at 1.3900 – 1.3915. On the support side, a successful test of the support at 1.3825 – 1.3840 will open the way to the test of the next support at 1.3750 – 1.3765.

USD/JPY Retreats As Traders Stay Bearish USD/JPY 110926 4h Chart USD/JPY pulled back as traders bet on hawkish BoJ and ignored the risks of a rate hike in the U.S. Treasury yields were mixed in today’s trading session. The yield of 10-year Treasuries climbed above the 4.61% level, while the yield of 10-year Treasuries pulled back towards 4.95%.

The nearest support level for USD/JPY is located in the 152.50 – 153.00 range. If USD/JPY declines below the 152.50 level, it will head towards the next support at 149.50 – 150.00.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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