Title: USD/CAD Forecast Analysis – 14 October 2025
Source: Original article by Christopher Lewis, DailyForex.com
Supplemented with additional content from Forex Factory, Investing.com, and TradingView
The USD/CAD currency pair remains in focus as traders evaluate the economic trends in Canada and the United States, particularly against the backdrop of evolving interest rate expectations, inflation data, and commodity price shifts. As of mid-October 2025, the USD/CAD has shown a continuation of bullish momentum, highlighting both technical and fundamental factors that encourage long positioning. This detailed analysis surveys these dynamics thoroughly.
Overview of Recent Price Action
– The USD/CAD pair has been in an uptrend, continuing to show strength above the 1.36 level.
– Price action has recently pressed toward the 1.37 resistance area, suggesting persistent bullish sentiment.
– Traders are observing a mix of strong US dollar fundamentals and comparatively weaker sentiment surrounding the Canadian dollar.
Key Technical Levels
– Support Levels:
– 1.3600: Former resistance turned support, now a pivotal area in the current trend.
– 1.3500: A psychological round number level and a previous demand zone.
– Resistance Levels:
– 1.3700: Currently acts as immediate resistance; previous swing highs are consolidating here.
– 1.3750: If broken, this opens the path toward the 1.38 area, signaling a strong upside breakout.
Technical Indicators
– Moving Averages:
– The 50-day EMA is trending above the 200-day EMA, reinforcing the bullish trend.
– Price is consistently trading above both the 50-day and 200-day moving averages, indicating bullish momentum.
– RSI (Relative Strength Index):
– Hovering near the 60–70 region, suggesting that the pair is not yet overbought but remains strong.
– MACD:
– The MACD is in positive territory, with a widening histogram. This continues to signal bullish momentum is increasing.
Candlestick Patterns
– Recent candlestick patterns lean bullish as multiple strong-bodied green candles have emerged in the daily and 4-hour timeframes.
– No significant reversal patterns have yet emerged, but a key watchpoint will be how price reacts to the 1.37–1.3750 resistance zone.
US Dollar Strength Factors
– The US economy continues to display resilience compared to many of its global counterparts, including Canada.
– The most recent Non-Farm Payrolls (NFP) release exceeded projections, reinforcing strength in the US labor market.
– Inflation figures (CPI and PPI) in the United States have stayed elevated, supporting the Federal Reserve’s cautious approach to rate cuts.
– Interest Rate Outlook:
– Traders continue to speculate that the Federal Reserve may extend high interest rates into early-mid 2026.
– Fed members have maintained a “higher for longer” stance across commentary in recent weeks, strengthening the dollar.
– US Dollar Index (DXY):
– The DXY is maintaining levels above 106.00, showing long-term confidence in the greenback.
Canadian Dollar Weakness Factors
– Oil Prices Influence:
– The Canadian dollar is heavily correlated with oil prices, given Canada’s commodity export economy.
– West Texas Intermediate (WTI) crude oil has struggled to maintain elevation above $85 per barrel since late September 2025.
– Recent builds in US crude oil inventories, as reported by the EIA, are pressuring oil prices lower.
– Bank of Canada Policy:
– The BoC has signaled a less aggressive approach toward rate hikes and may consider cuts if economic data continues to soften.
– Canadian inflation has been moderating, with core CPI declining on a year-over-year basis to 2.3% in the latest report.
– Employment Data:
– Canada’s employment report for September showed only modest gains, and the unemployment rate rose to 6
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