1.3950: USD/CAD Holds Near This Level After Retreat From Falling Wedge Top – Price Forecast

1.3900 marks potential initial support for USD/CAD near the falling wedge’s lower boundary.
37 is the reading on the 14-day Relative Strength Index, indicating easing downward momentum.
1.3990 marks immediate resistance near the falling wedge’s upper boundary.

USD/CAD trades near 1.3970. The pair is lower in Tuesday’s European session, reversing modest gains from the previous day. On the daily chart, price action is approaching the upper resistance line of a falling wedge. This places the market near a key turning point, with a bullish breakout potentially imminent. A retreat from the wedge’s top, however, indicates that sellers continue to defend that 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 measures. At 37, the 14-day Relative Strength Index (RSI) points to easing downward momentum, although the reading still favours weakness rather than a sustained recovery.

Initial downside support could emerge around 1.3900, at the falling wedge’s lower boundary. Should USD/CAD break beneath the pattern, further selling pressure could take it towards the five-month low of 1.3732 set on 21 May. Beyond that lies 1.3481, the lowest level since October 2024.

A rebound could bring USD/CAD up against immediate resistance around 1.3990, at the wedge’s upper boundary. The nine- and 50-day EMAs follow at 1.4010 and 1.4051, respectively. Clearing this confluence of resistance 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: Daily Technical Chart

25bps BoC hike viewed as pre-emptive; Macklem strikes 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 from analysts at Standard Chartered. They note that “consensus leaned towards a hike,” although many observers considered “such a move unnecessary amid subdued core inflation and soft growth.” The analysts see the decision as evidence of the BoC’s “strong preference to hike pre-emptively in response to inflation risks.”

Later comments by Governor Tiff Macklem reinforced that signal, according to Scotiabank. 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 shifted market perceptions of the rate 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: Today’s Performance

The Canadian Dollar (CAD) recorded its weakest performance against the Swiss Franc today. The table below sets out its percentage changes 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 displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Selecting the Canadian Dollar on the left and following its row across to the US Dollar, for instance, gives the percentage change for CAD (base)/USD (quote) in the corresponding cell.