USD/CAD Price Forecast: Hangs near multi-week low, holds above 1.4100 ahead of Canadian CPI

USD/CAD attracts sellers for the third straight day, though it lacks follow-through.
Retreating oil prices cap the Loonie, while geopolitical risks revive USD demand.
Traders look forward to Canadian inflation data amid a negative technical setup.

Haresh Menghani FXStreet

The USD/CAD pair remains under some selling pressure for the third straight day on Monday, prolonging last week's rejection slide from the 1.4300 mark, or its highest level since April 2025. Spot prices drop to an over three-week low, around the 1.4100 neighborhood, during the Asian session as traders now look forward to the latest Canadian consumer inflation figures for a fresh impetus.

Heading into the key data risk, a modest pullback in crude oil prices from a one-month high, touched on Friday, undermines the commodity-linked Loonie. The US Dollar (USD), on the other hand, benefits from the global flight to safety amid persistent geopolitical uncertainties and bets that the US Federal Reserve (Fed) will raise borrowing costs in December. This, in turn, could limit the downside for the downside for the USD/CAD pair, warranting caution for aggressive bearish traders.

From a technical perspective, spot prices hold above the 200-period Simple Moving Average (SMA) on the 4-hour chart and a dense Fibonacci retracement base, which keeps a constructive bias in place despite fading momentum. Meanwhile, the Relative Strength Index (RSI) hovers just under 30, hinting at oversold conditions, while the Moving Average Convergence Divergence (MACD) remains slightly negative, suggesting downside pressure is slowing rather than accelerating.

Hence, a sustained break and acceptance below the 1.4100 mark, which nears the 38.2% retracement, is needed to back the case for deeper losses towards the 50.0% level at 1.4029 and deeper Fibonacci floors at 1.3967 and 1.3878. Some follow-through selling below these would expose the cycle low region around 1.3764, while the 200-period SMA at 1.4065 reinforces the broader support band beneath spot. On the topside, initial resistance aligns with the 23.6% Fibo. retracement at 1.4169, with a subsequent hurdle at the recent swing high around 1.4295.

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

USD/CAD 4-hour chart

Economic Indicator

BoC Consumer Price Index Core (YoY)

The BoC Consumer Price Index Core, released by the Bank of Canada (BoC) on a monthly basis, represents changes in prices for Canadian consumers by comparing the cost of a fixed basket of goods and services. It is considered a measure of underlying inflation as it excludes eight of the most-volatile components: fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation and tobacco products. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

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