USD/CAD Price Forecast: Pair tests six-week lows at 1.3968 as US Dollar weakens

Fresh six-week lows below 1.3960 mark a third successive day of declines for USD/CAD.
Falling yields, driven by stronger demand for US Treasury bonds, weigh on the US Dollar.
With oil prices close to five-month highs, the Canadian Dollar advances sharply.

Elevated oil prices are supporting the commodity-sensitive Canadian Dollar (CAD), while risk aversion is driving US Treasury yields lower. Against this backdrop, the US Dollar (USD) is falling against its Canadian counterpart for a third successive day on Friday. With USD/CAD testing six-week lows at 1.3968, the pair is heading for a decline of more than 2% over a three-week sell-off.

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

Following disappointing results from Google Alphabet, renewed fears of an AI bubble have prompted investors to leave equities for the safety of US government bonds during the US and Asian sessions. The retreat in US Treasury yields has continued, with the US 10-year yield down more than 30 basis points in October, adding to downward pressure on the Greenback.

Meanwhile, elevated prices for oil, Canada’s principal export, continue to underpin the Loonie. Brent oil is holding above 112.00 a barrel and is on course for a monthly gain of nearly 20%. The US and Iran remain far from reaching a peace agreement, while attacks continue on vessels seeking to pass through the Strait of Hormuz.

Technical Analysis: USD/CAD Targets the 1.3900 Area Below 1.3968

Trading near 1.3961, USD/CAD retains its downward trend. The 4-hour Relative Strength Index (14) stands at 32.5, close to oversold territory, while the Moving Average Convergence Divergence (MACD) sits just below zero. Together, these indicators suggest sellers remain firmly in control.

If a break below support around 1.3968 (the 23 October low) is confirmed, attention would turn to the mid-September lows near 1.3900, followed by the 78.6% Fibonacci retracement level around 1.3875.

To relieve the downward pressure, buyers would instead need to overcome Thursday’s high near the psychological 1.4000 level, as well as the 21 and 23 October highs in the 1.4070-1.4080 area.

(An AI tool assisted in preparing this article’s technical analysis. Learn more.)

Canadian Dollar Records Its Strongest Gain Against the US Dollar Today

Today’s percentage movements in the Canadian Dollar (CAD) against the major currencies listed are set out below. Its strongest performance was against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.16%	-0.39%	-0.27%	-0.21%	-0.02%	-0.17%	-0.38%
EUR	0.16%		-0.23%	-0.11%	-0.04%	0.16%	-0.02%	-0.22%
GBP	0.39%	0.23%		0.13%	0.19%	0.38%	0.22%	0.00%
JPY	0.27%	0.11%	-0.13%		0.07%	0.25%	0.09%	-0.11%
CAD	0.21%	0.04%	-0.19%	-0.07%		0.18%	0.03%	-0.18%
AUD	0.02%	-0.16%	-0.38%	-0.25%	-0.18%		-0.16%	-0.36%
NZD	0.17%	0.02%	-0.22%	-0.09%	-0.03%	0.16%		-0.20%
CHF	0.38%	0.22%	-0.01%	0.11%	0.18%	0.36%	0.20%

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.