|

USD/CAD Price Forecast: Trades below 1.3800 with bullish bias on weak Oil, USD uptick

  • USD/CAD stalls the previous day’s sharp retracement slide from its highest level since April 13.
  • Weaker Oil prices undermine the Loonie and support spot prices amid a modest USD uptick.
  • The technical setup favors bulls, warranting some caution before positioning for further losses.

The USD/CAD pair attracts some dip-buyers during the Asian session on Friday, stalling the previous day's sharp retracement slide from the 1.3870 region, or the highest level since April 13. Spot prices, however, lack follow-through and remain below the 1.3800 mark, warranting caution before positioning for the resumption of the monthly uptrend amid mixed signals over a potential US-Iran peace deal.

Axios, citing two US officials, reported that the US and Iran have reached a draft agreement to extend the ongoing ceasefire for 60 days. The optimism, in turn, keeps Crude Oil prices depressed close to an over a one-month low touched on Thursday, which is seen undermining the commodity-linked Loonie and acting as a tailwind for the USD/CAD pair. Meanwhile, the US and Iran remain at odds over key issues, including Tehran's nuclear program and the Strait of Hormuz. This keeps the enthusiasm under check, which, along with bets that the US Federal Reserve (Fed) will hike rates by the end of this year, helps revive the US Dollar (USD) demand and further supports spot prices.

From a technical perspective, the overnight downfall dragged the USD/CAD pair below the 23.6% Fibonacci retracement level of the recent upswing from the monthly low. However, momentum indicators are holding a constructive bullish bias and back the topside tilt. Furthermore, the Relative Strength Index (RSI) is hovering near 57, and Moving Average Convergence Divergence (MACD) is in positive territory, hinting that buyers still retain control while spot prices stay above the 38.2% Fibo. support near mid-1.3700s. If a deeper pullback unfolds, spot prices could find decent support around 1.3720-1.3700 confluence – comprising the 50% Fibo. and the 100-day Simple Moving Average (SMA).

On the topside, momentum back above the 23.6% retracement at 1.3797 would open the door toward the overnight swing high, near 1.3872. This is followed by the 1.3900 round figure and the 1.3930-1.3940 supply zone, which, if cleared decisively, should pave the way for an extension of the month-to-date uptrend.

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

USD/CAD daily chart

Chart Analysis USD/CAD

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.

USDEURGBPJPYCADAUDNZDCHF
USD0.11%0.06%0.05%0.03%0.02%-0.40%0.03%
EUR-0.11%-0.05%-0.04%-0.07%-0.07%-0.47%-0.08%
GBP-0.06%0.05%0.00%-0.04%-0.03%-0.43%-0.02%
JPY-0.05%0.04%0.00%-0.01%-0.03%-0.46%-0.03%
CAD-0.03%0.07%0.04%0.00%-0.02%-0.42%-0.00%
AUD-0.02%0.07%0.03%0.03%0.02%-0.40%0.01%
NZD0.40%0.47%0.43%0.46%0.42%0.40%0.42%
CHF-0.03%0.08%0.02%0.03%0.00%-0.01%-0.42%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Week ahead: Central bank and earnings bonanza could roil markets

After joining the rate-hike club in September, the Federal Reserve looks set to stand pat in October, waiting to assess more data before deciding to hike again. Whilst this isn’t an unusual move for a central bank, it somewhat contradicts Fed Chair Kevin Warsh’s new mantra of data dependency and zero forward guidance.

CFTC Report: WTI rally runs ahead of positioning
The week in one sentence: WTI prices surged while speculative longs were cut in the week to October 20, creating the clearest price/positioning divergence. Sterling and the Canadian Dollar led the constructive currency shift, while Yen longs also rebuilt. Speculators turned less constructive on the WTI, reducing their net exposure to around 89.3K contracts.
What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.