USD/CAD Price Forecast; Oil prices weigh on CAD as Dollar gains above 1.4000

Following Friday’s five-month lows near 1.3960, USD/CAD rebounds above 1.4000.
Ahead of the Fed’s decision, the US Dollar recovers some ground as softer oil prices put pressure on the CAD.
After a 2% decline over the previous two weeks, early indications suggest the pair may be forming a base.

Following a decline of nearly 2% over the previous two weeks, USD/CAD is recovering on Monday, though the broader trend remains bearish. The pair trades at 1.4023, having rebounded from Friday’s lows of 1.3968. The US Dollar (USD) is regaining some ground against the Canadian Dollar (CAD) as investors prepare for Wednesday’s monetary policy decision from the US Federal Reserve (Fed). Meanwhile, falling oil prices are weighing on the commodity-sensitive Loonie.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Attention is returning to the Fed’s monetary policy decision, with the Greenback advancing against its major peers in subdued trading on Monday. Following September’s rate increase, the bank is widely expected to keep rates unchanged. However, elevated inflation risks have encouraged expectations of a second quarter-point increase in December.

Adding to the pressure on the Loonie, oil prices have retreated about 2% from Friday’s highs. At the time of writing, Brent Oil trades at around $110.30 a barrel, compared with Friday’s highs near $113.00. Markets have welcomed reports that Qatari negotiators have arrived in Tehran in an effort to ease the conflict with the US. US President Trump has also ruled out further attacks on Iran before the mid-term elections, helping to relieve pressure on prices.

Technical Analysis: Friday’s "Hammer" candle signals a possible bullish reversal

At 1.4018, USD/CAD continues to face limits on its upside, although Friday’s "hammer" candle is a pattern that often precedes a bullish reversal. Daily momentum indicators nevertheless remain negative. With the Relative Strength Index (14) below 40 and the Moving Average Convergence Divergence (MACD) firmly in negative territory, the indicators together suggest that rallies may encounter resistance.

Thursday’s high around 1.4040 continues to restrain buyers, blocking the route towards the 19 October low and 21 October high around 1.4080.

Initial downside support lies around the 17 and 18 September lows in the 1.3975 area, alongside the 61.8% Fibonacci retracement of the September–October rally at 1.3965. Below those levels, attention would turn to the 2 September high near 1.3940 and the 78.2% Fibonacci retracement at 1.3874.

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

Canadian Dollar Records Its Strongest Performance Against the Yen Today

Today’s percentage movements in the Canadian Dollar (CAD) against the major currencies listed are set out below. The Canadian Dollar recorded its strongest performance against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.12%	0.19%	0.43%	0.10%	0.17%	0.35%	0.20%
EUR	-0.12%		0.11%	0.26%	-0.03%	0.05%	0.25%	0.09%
GBP	-0.19%	-0.11%		0.17%	-0.12%	-0.06%	0.14%	-0.02%
JPY	-0.43%	-0.26%	-0.17%		-0.29%	-0.25%	-0.05%	-0.21%
CAD	-0.10%	0.03%	0.12%	0.29%		0.04%	0.26%	0.10%
AUD	-0.17%	-0.05%	0.06%	0.25%	-0.04%		0.21%	0.03%
NZD	-0.35%	-0.25%	-0.14%	0.05%	-0.26%	-0.21%		-0.15%
CHF	-0.20%	-0.09%	0.02%	0.21%	-0.10%	-0.03%	0.15%

Percentage movements between the major currencies are illustrated in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the Canadian Dollar on the left and following its row across to the US Dollar gives the percentage change for CAD (base)/USD (quote) in the corresponding cell.