USD/CAD Price Forecast: Pullback from falling wedge resistance leaves pair trading near 1.3950

Around 1.3900, the falling wedge’s lower boundary may provide initial support for USD/CAD.
A reading of 37 on the 14-day Relative Strength Index points to easing downward momentum.
Around 1.3990, the upper boundary of the falling wedge presents the nearest resistance.

At around 1.3970 during Tuesday’s European session, USD/CAD is retreating after the previous day’s modest advance. On the daily chart, the pair remains close to the resistance line forming the top of a falling wedge. This places the market near a pivotal point at which a bullish breakout may be imminent. Nevertheless, the retreat from the wedge’s upper boundary indicates that sellers continue to defend that level.

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Trading below both the nine- and 50-period Exponential Moving Averages (EMAs), USD/CAD retains a bearish short-term bias. Its retreat from recent highs has left the pair beneath these short- and medium-term trend gauges. Although the 14-day Relative Strength Index (RSI) reading of 37 indicates that downward momentum is easing, it continues to point to weakness rather than a sustained recovery.

Initial support could come into focus around 1.3900, where the lower edge of the falling wedge lies. Should USD/CAD break beneath the pattern, renewed selling pressure could take it towards the region of 1.3732, the five-month low recorded on 21 May. Beyond that stands 1.3481, the lowest level since October 2024.

A rebound in USD/CAD could bring a test of the wedge’s upper boundary around 1.3990, the nearest resistance. Above it, the nine- and 50-day EMAs stand at 1.4010 and 1.4051, respectively. Clearing this resistance confluence would trigger a bullish reversal, supporting a move towards 1.4299, the nearly 18-month high reached on 14 October.

Chart Analysis USD/CAD — USD/CAD Nears Wedge Resistance on the Daily Chart

BoC Delivers Pre-emptive Hike as Macklem Strikes a Hawkish Tone

The Bank of Canada (BoC) “raised the policy rate by 25bps to 2.5% at its 28 October meeting; we had expected a pause.” That is the assessment of analysts at Standard Chartered, who note that “consensus leaned towards a hike,” even though many observers considered “such a move unnecessary amid subdued core inflation and soft growth.” For the analysts, the decision demonstrates the BoC’s “strong preference to hike pre-emptively in response to inflation risks.”

Later comments by Governor Tiff Macklem reinforced that signal, in Scotiabank’s assessment. The bank notes that “comments from BoC Gov. Macklem reported by Bloomberg late Wednesday offered a relatively hawkish read, relative to a statement and press conference that had been somewhat more restrained,” implying that his tone may have pushed market perceptions of the decision further towards a hawkish interpretation.

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

Canadian Dollar Performs Weakest Against Swiss Franc Today

Today’s percentage moves in the Canadian Dollar (CAD) against the major currencies listed are set out below. Its weakest performance was against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.03%	-0.04%	0.08%	-0.16%	0.39%	0.02%	-0.09%
EUR	-0.03%		-0.06%	0.04%	-0.19%	0.36%	-0.02%	-0.13%
GBP	0.04%	0.06%		0.08%	-0.12%	0.43%	0.03%	-0.06%
JPY	-0.08%	-0.04%	-0.08%		-0.22%	0.32%	-0.05%	-0.15%
CAD	0.16%	0.19%	0.12%	0.22%		0.55%	0.17%	0.06%
AUD	-0.39%	-0.36%	-0.43%	-0.32%	-0.55%		-0.37%	-0.48%
NZD	-0.02%	0.02%	-0.03%	0.05%	-0.17%	0.37%		-0.10%
CHF	0.09%	0.13%	0.06%	0.15%	-0.06%	0.48%	0.10%

Percentage movements between the major currencies are displayed 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.