- The USD/CAD weekly forecast stays in a gradual downtrend amid a weaker dollar.
- BoC and Fed divergence might stay favorable for the USD/CAD sellers.
- Job reviews from each side, due subsequent week, will likely be key to observe.
The USD/CAD closed final week below stress, extending a gradual downward pattern that started in late 2025. Each currencies struggled to achieve momentum, because the continued weak point of the US greenback persevered within the FX markets. In the meantime, the Canadian greenback was supported by secure home knowledge. As an alternative of a pointy sell-off, the draw back transfer was restricted, as sellers nonetheless dominated however with none impetus.
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The first driver has been the altering outlook for US financial coverage. The US greenback additionally completed 2025 on the steepest annual decline in eight years, and this weak point carried into the primary full buying and selling week of 2026. Softer US labor knowledge, coupled with rising expectations that the Federal Reserve will ship a minimum of two charge cuts this 12 months, have weighed closely on the dollar. Political uncertainty relating to the longer term management of the Fed has contributed to investor warning, preserving greenback rallies short-lived.
The Financial institution of Canada has held a extra average place on the Canadian facet. Though charge cuts have been left on the desk for a later time in 2026, officers have been cautious to not promise an excessive amount of, particularly when inflation charges are proving cussed in some quarters.
This comparative political stability has helped curb the negativity within the Canadian greenback, regardless of lingering international progress issues. Oil costs haven’t skyrocketed however have remained regular sufficient to assist the CAD.
The earlier week’s value motion recorded USD/CAD as probing on the decrease assist however failing to interrupt decisively. The patrons are nonetheless seen on dips, indicating that the market stays cautious of pursuing draw back with out additional proof that the US knowledge will worsen. That indecision has stored the 2 in a sluggish grind as an alternative of a precipitous fall.
The next week may very well be pivotal to set the route. Ought to US knowledge assist the story of decelerated progress and waning inflation tracts, USD/CAD might lastly breach the assist and open the door to an extra downward transfer. However, any optimistic shock within the US, particularly relating to inflation, might induce a corrective rebound, as positioning is displaying a extra substantial imbalance in opposition to the greenback.
Canadian knowledge can even be important. Robust home releases might encourage CAD bulls, whereas financial weak point would rekindle downward threat on the forex and stabilize the USD/CAD trade charge.
USD/CAD Main Occasions Subsequent Week
- US ISM Manufacturing PMI (Monday)
- US ISM Companies PMI (Tuesday)
- ADP Employment and JOLTS Job Openings (Wednesday)
- Canada Employment Report (Friday)
- US NFP and Client Sentiment (Friday)
USD/CAD Weekly Technical Forecast: Corrective Upside Beneath 20-DMA
The USD/CAD every day chart reveals a corrective upside as profit-taking occurred because of the oversold RSI. Nevertheless, the worth stays properly under the 20-day MA at 1.3765, whereas a number of MA crossovers recommend room for extra draw back.
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The upside may very well be capped by the 200-day MA close to 1.3860, whereas the draw back goal may very well be seen on the demand zone close to 1.3550. The indications recommend the trail of least resistance lies on the draw back.
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