USD/CAD Price Forecast: Extends winning streak for fifth trading day

USD/CAD jumps to near 1.3770 as the US Dollar gains on upbeat market mood.
Market sentiment turns risk-averse as the US strikes Venezuela.
Investors await the US ISM Manufacturing PMI data for December.

Sagar Dua FXStreet

The USD/CAD pair extends its winning streak for the fifth trading day on Monday. The Loonie pair trades 0.25% higher to near 1.3770 during the European trading session as the US Dollar (USD) gains, while the Canadian Dollar (CAD) underperforms in a dismal market mood.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher to near 98.60.

Investors turn risk-averse amid geopolitical risks, following the United States’ (US) strike on Venezuela.

On the domestic front, the US Dollar is expected to trade volatile as a slew of US economic data, notably the Nonfarm Payrolls (NFP) data, is lined up for release this week.

In Monday’s session, investors will focus on the US ISM Manufacturing PMI data for December, which will be published at 15:00 GMT. The Manufacturing PMI is expected to come in slightly higher at 48.3 from 48.2 in November.

USD/CAD technical analysis

In the daily chart, USD/CAD trades at 1.3768. The 20-day EMA has flattened at 1.3765 after a steady descent, with price marginally back above it. A daily close above the average would hint at a near-term base, while a slip back below would preserve the bearish bias. RSI at 46 recovers from oversold yet remains under the 50 midline. Measured from the 1.3540 low to the 1.4141 high, the 61.8% retracement at 1.3770 offers initial support.

Should buyers sustain a foothold above the 20-day EMA, a rebound toward the 50% retracement at 1.3840 could unfold. Failure to defend nearby retracement support would keep the tone fragile and leave downside risks intact. A move above RSI 50 would reinforce recovery attempts, while rejection beneath would cap rebounds.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

ISM Manufacturing PMI

The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The indicator is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that factory activity is generally declining, which is seen as bearish for USD.

Why it matters to traders?

The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) provides a reliable outlook on the state of the US manufacturing sector. A reading above 50 suggests that the business activity expanded during the survey period and vice versa. PMIs are considered to be leading indicators and could signal a shift in the economic cycle. Stronger-than-expected prints usually have a positive impact on the USD. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are watched closely as they shine a light on the labour market and inflation.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD regains mild traction, falters near 0.7150

AUD/USD gathers some steam and manages to flirt with the 0.7150 level on Thursday. However, the pair has retraced some of Wednesday’s significant pullback due to renewed selling pressure on the Greenback and a slight improvement in risk sentiment following hopes of a deal in the Middle East. Wrapping up the Australian docket, the RBA’s Hauser will speak early on Friday.

USD/JPY: Japanese Yen coiled at the line, leaning on everyone but Japan

The Yen is doing very little, and that stasis is the whole story. USD/JPY sits glued near 160.00 not because Japan has found new strength, but because two outside forces are fighting to a draw over it: a US rate complex that keeps the dollar bid, and a Ministry of Finance that refuses to let the line break.

Gold puts its 200-day SMA to the test near $4,420

Gold keeps the bullish stance in place in the latter part of Thursday’s session, although a convincing break above the key $4,500 mark per troy ounce still remains elusive. The precious metal’s advance comes amid the resurgence of some selling interest around the Greenback, improving risk sentiment, and declining US Treasury yields across the board.

Bitcoin falls below $64K as demand turns negative, short-term holders' selling intensifies

Bitcoin has fallen below $64,000 on Thursday amid weakening market demand and mounting selling pressure from short-term holders. The leading cryptocurrency slipped toward the $63,000 level amid a broader risk-off environment, with several key metrics signaling one of the most challenging periods of the current market cycle.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.