USD/CAD Price Forecast: What next as the pair trades around 1.3950 after retreating from the falling wedge’s upper boundary?

Initial support for USD/CAD could emerge near 1.3900, at the lower edge of the falling wedge.
Downward momentum appears to be easing, with the 14-day Relative Strength Index reading 37.
Near 1.3990, the falling wedge’s upper boundary forms the first resistance hurdle.

Selling pressure has returned to USD/CAD following the previous day’s modest advance, leaving the pair near 1.3970 in Tuesday’s European session. On the daily chart, the price is approaching the upper resistance line of a falling wedge, placing the market at a crucial turning point where an upside breakout may be imminent. Yet the retreat from the wedge’s upper edge indicates that sellers continue to defend this boundary.

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

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 it beneath these short- and medium-term trend indicators. Although the 14-day Relative Strength Index (RSI), at 37, points to easing downward momentum, it continues to suggest weakness rather than a sustained rebound.

Should USD/CAD extend its decline, the falling wedge’s lower boundary near 1.3900 may provide the first support. A breach of that boundary could intensify selling pressure towards the five-month low of 1.3732 set on 21 May. Beyond that, 1.3481, the lowest level since October 2024, would be the next downside reference.

A recovery in USD/CAD could bring the wedge’s upper boundary near 1.3990 into focus as the immediate resistance. The next hurdles are the nine- and 50-day EMAs, at 1.4010 and 1.4051, respectively. Clearing this resistance confluence would trigger a bullish reversal and help the pair move towards 1.4299, the nearly 18-month high reached on 14 October.

Chart Analysis USD/CAD — USD/CAD: What Does the Daily Chart Indicate?

Does Macklem’s hawkish tone reinforce the view of a pre-emptive BoC hike?

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

Later comments by Governor Tiff Macklem reinforced that message, 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,” indicating 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.)

How Is the Canadian Dollar Performing Today?

The Canadian Dollar was weakest against the Swiss Franc today. The table below sets out the Canadian Dollar’s (CAD) percentage moves against the major currencies listed.

	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 major currencies are presented in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read CAD (base)/USD (quote), for instance, locate the Canadian Dollar on the left and follow its row horizontally to the US Dollar column; the intersecting cell gives the percentage change.