USD/CAD Price Forecast: US Dollar gains momentum and targets 1.3940 area
- USD/CAD bulls push against the 1.3870 resistance area, aiming for the monthly high at 1.3940.
- The US Dollar rallies across the board as investors ramp up bets on a Fed rate hike on Wednesday.
- Canada's CPI is expected to show that inflation moderated in August.
US Dollar (USD) appreciates for the fourth consecutive day against the Canadian Dollar (CAD) on Monday, as rising bets of a Federal Reserve (Fed) rate hike on Wednesday offset the traditional positive impact of higher Oil prices on the Canadian Dollar. The USD/CAD pair has pierced resistance at the 1.3870 area, with bulls aiming for the monthly high at 1.3940 and probably higher.
Analysts at ING argue that “the dollar would welcome a hike in that it would back up the Fed’s monetary policy credibility and take a little more steam out of the debasement trade,” a theme that had “evolved last year both from doubts over Fed independence and more recently from US Treasury intervention.”
In Canada, the focus on Monday is on August's Consumer Price Index (CPI) data, which is expected to have stalled, following a 0.5$ growth in July, with the BoC CPI growing at a steady 0.2% pace, unchanged from the previous month. These numbers do not put any particular pressure on the Bank of Canada (BoC) to hike interest rates and, barring an inflationary surprise, are not expected to boost CAD's recovery,
Technical Analysis: USD, heading to 1.3940 and probably higher
USD/CAD trades at 1.3893, above the top of the last two weeks' trading range, at the 1.3870 area. This move, coupled with the higher low printed last week, hints at a potential Gartley pattern, heading to the September 2 high at 1.3940, probably on its way to the 78.6% Fibonacci retracement of the August selloff, at the 1.4050 area.
Momentum indicators in the daily chart endorse that view, as the Relative Strength Index (14) pops up above the key 50 level, and the Moving Average Convergence Divergence (MACD) histogram hints at improving, though not aggressive, bullish momentum.
On the downside, a bearish reaction below the 1.3870 area might face support at Friday's low near 1.3835. A clear break below the September 9 low, at 1.3766, negates the bullish view.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.50% | 0.31% | 0.74% | 0.17% | 0.61% | 0.75% | 0.09% | |
| EUR | -0.50% | -0.17% | 0.21% | -0.36% | 0.11% | 0.26% | -0.42% | |
| GBP | -0.31% | 0.17% | 0.38% | -0.16% | 0.28% | 0.43% | -0.31% | |
| JPY | -0.74% | -0.21% | -0.38% | -0.56% | -0.10% | 0.01% | -0.68% | |
| CAD | -0.17% | 0.36% | 0.16% | 0.56% | 0.43% | 0.57% | -0.14% | |
| AUD | -0.61% | -0.11% | -0.28% | 0.10% | -0.43% | 0.15% | -0.60% | |
| NZD | -0.75% | -0.26% | -0.43% | -0.01% | -0.57% | -0.15% | -0.74% | |
| CHF | -0.09% | 0.42% | 0.31% | 0.68% | 0.14% | 0.60% | 0.74% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).