Above 1.4000: USD/CAD price forecast as Dollar gains and Oil prices weigh on CAD

1.4000 is back below USD/CAD. The pair has rebounded from Friday's five-month lows near 1.3960.
Ahead of the Fed's decision, the US Dollar recovers some ground as softer oil prices put pressure on the CAD.
Following a 2% decline over the previous two weeks, the pair is displaying early indications of a bottom.

USD/CAD is trading at 1.4023. The US Dollar (USD) is recovering some losses against the Canadian Dollar (CAD) on Monday ahead of Wednesday's US Federal Reserve (Fed) monetary policy decision. Meanwhile, weaker Oil prices are weighing on the commodity-sensitive Loonie. The pair has rebounded from Friday's lows of 1.3968, but the broader trend remains bearish following a sell-off of nearly 2% over the previous two weeks.

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

With attention returning to the Fed's monetary policy decision, the Greenback is gaining against its major peers in quiet trading on Monday. A rate hold is widely anticipated after the bank raised rates in September. Elevated inflation risks, however, have strengthened expectations for a second quarter-point increase in December.

Adding to pressure on the Loonie, Oil prices have retreated about 2% from Friday's highs. Brent Oil is trading at around $110.30 a barrel at the time of writing, compared with Friday's highs near $113.00. Markets have welcomed reports that Qatari negotiators have reached Tehran in an attempt to de-escalate the conflict with the US. US President Trump has also ruled out further attacks on Iran before the mid-term elections, helping to ease pressure on prices.

Technical Analysis: Friday's "Hammer" Signals Possible Bullish Reversal

At 1.4018, USD/CAD remains constrained, although Friday's "hammer" candle offers a possible bullish reversal signal. Daily momentum indicators still sit at negative levels. With the Relative Strength Index (14) below 40 and the Moving Average Convergence Divergence (MACD) deep in negative territory, rallies could continue to face resistance.

Thursday's high around 1.4040 continues to cap the bulls. This barrier blocks the route towards the 1.4080 area, which marks the October 19 low and October 21 high.

Initial downside support lies around 1.3975, where the September 17 and 18 lows cluster, followed by 1.3965, the 61.8% Fibonacci retracement of the September–October rally. Below these levels, attention would turn to the September 2 high near 1.3940 and the 78.2% Fibonacci retracement at 1.3874.

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

Canadian Dollar: Today's Currency Performance

The Canadian Dollar (CAD) recorded its strongest performance against the Japanese Yen today. The table below sets out its percentage changes against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.12%	0.19%	0.43%	0.10%	0.17%	0.35%	0.20%
EUR	-0.12%		0.11%	0.26%	-0.03%	0.05%	0.25%	0.09%
GBP	-0.19%	-0.11%		0.17%	-0.12%	-0.06%	0.14%	-0.02%
JPY	-0.43%	-0.26%	-0.17%		-0.29%	-0.25%	-0.05%	-0.21%
CAD	-0.10%	0.03%	0.12%	0.29%		0.04%	0.26%	0.10%
AUD	-0.17%	-0.05%	0.06%	0.25%	-0.04%		0.21%	0.03%
NZD	-0.35%	-0.25%	-0.14%	0.05%	-0.26%	-0.21%		-0.15%
CHF	-0.20%	-0.09%	0.02%	0.21%	-0.10%	-0.03%	0.15%

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 that row across to the US Dollar, for example, gives the percentage change for CAD (base)/USD (quote) in the corresponding cell.