US Dollar Forecast: USD/CAD Stages Three-Day Rally
US Dollar Outlook: USD/CAD
USD/CAD attempts to retraces the decline from the start of the week as it stages a three-day rally, and the exchange rate may track the positive slope in the 50-Day SMA (1.4139) as it holds above the moving average.
US Dollar Forecast: USD/CAD Stages Three-Day Rally
Keep in mind, USD/CAD registered a fresh monthly low (1.4280) as Canadian Prime Minister Justin Trudeau announced his resignation at the start of the week, with the market reaction keeping the exchange rate within the December range.
Join David Song for the Weekly Fundamental Market Outlook webinar.
In turn, USD/CAD may negate the bull-flag formation carried over from last month should it trade within a defined range, and the Relative Strength Index (RSI) may continue to show the bullish momentum abating as it moves away from overbought territory.
US/Canada Economic Calendar
Nevertheless, developments coming out of the US and Canada may sway USD/CAD as the Federal Reserve and Bank of Canada (BoC) pursue a neutral policy, and the exchange rate may threaten the opening range for January following the employment reports should the data prints deviate from the consensus forecast.
With that said, a limited reaction to the US/Canada employment report may keep USD/CAD within the December range, but a continuation pattern may unfold should the exchange rate track the positive slope in the 50-Day SMA (1.4139).
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CAD Price on TradingView
- USD/CAD retraces the decline from the start of the week as it bounces back from the 1.4280 (38.2% Fibonacci extension) to 1.4299 (April 2020 high) zone but need a break/close above the 1.4460 (61.8% Fibonacci extension) to 1.4480 (100% Fibonacci extension) area to open up 1.4590 (78.6% Fibonacci extension).
- Next region of interest comes in around 1.4750 (100% Fibonacci extension) but USD/CAD may continue to negate the bull-flag formation from last month should it struggle to push above the December high (1.4467).
- Lack of momentum to hold above the 1.4280 (38.2% Fibonacci extension) to 1.4299 (April 2020 high) zone may push USD/CAD back towards the 1.4170 (23.6% Fibonacci extension) to 1.4210 (78.6% Fibonacci extension) region, with the next area of interest coming in around 1.4000 (61.8% Fibonacci extension) to 1.4040 (23.6% Fibonacci retracement).
Additional Market Outlooks
EUR/USD Weakness Brings January Opening Range in Focus
US Non-Farm Payrolls (NFP) Report Preview (DEC 2024)
USD/JPY Clears December High Ahead of US NFP Report
GBP/USD Recovery Keeps 2024 Range Intact
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2025