**USD/CAD Forecast and Analysis – November 5, 2025**
*Adapted and expanded from an article by Christopher Lewis at DailyForex*
The USD/CAD currency pair has recently seen increased volatility due to shifting economic data and central bank sentiment. With a resurgence of activity surrounding interest rate projections, both from the Federal Reserve and the Bank of Canada, traders are trying to navigate a landscape marked by market uncertainty and macroeconomic crosscurrents.
Here’s a detailed look into technical factors, fundamental data, recent developments, and potential forecasts for USD/CAD, offering traders a comprehensive view of where this currency pair might be headed in the near to intermediate term.
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**USD/CAD Key Takeaways (as of November 5, 2025)**
– The pair is reacting to central bank policy divergence, particularly between the U.S. Federal Reserve and the Bank of Canada.
– Recent movements are constrained within a well-established trading range.
– Crude oil prices play a significant role, given Canada’s strong correlation to commodity exports.
– Technical analysis suggests potential support around the 1.36 level, with possible resistance near 1.39.
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**Fundamental Overview**
The USD/CAD pair reflects not just currency flows, but also differing monetary policy approaches between the U.S. and Canada.
1. **Federal Reserve Policy Outlook**
– The U.S. economy remains relatively resilient with only slight signs of cooling.
– The Fed has signaled a prolonged higher-for-longer stance on interest rates to keep inflation in check.
– Federal Reserve Chair Jerome Powell’s remarks in recent FOMC statements emphasize that while inflation is trending downward, progress remains uneven.
– Fed fund futures have priced in minimal probability of a rate cut in the next quarter, pushing yield advantage toward the U.S. dollar.
2. **Bank of Canada’s Dovish Tilt**
– Contrary to the Fed, the Bank of Canada appears increasingly dovish.
– GDP growth in Canada has stagnated as consumers and businesses grapple with high borrowing costs.
– Inflation is trending lower but is still within the Bank’s upper tolerance range.
– The Canadian central bank has hinted that rate hikes are most likely over and the next move could be downward if disinflation persists.
3. **Crude Oil Prices and the Canadian Dollar**
– Canada is a major oil exporter, so CAD’s strength is often correlated with crude oil prices.
– West Texas Intermediate (WTI) has been trading near the $82 per barrel level, down from its peak earlier this year.
– A gradual easing of tight global oil supplies and weaker demand forecasts from China have slightly softened oil prices, putting downward pressure on CAD.
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**Technical Analysis: USD/CAD Price Action**
On the charts, USD/CAD is showcasing a mostly consolidative pattern, though there are signs of directional intent on certain momentum indicators.
1. **Support and Resistance Zones**
– Key support is found near the 1.3600–1.3620 range, which has offered buying interest in recent sessions.
– Resistance is charted around the 1.3870–1.3900 region, which previously halted upside surges.
– A sustained move above 1.3900 could open up a new leg higher toward the 1.4000 psychological mark.
2. **Moving Averages**
– The 50-day simple moving average (SMA) is currently trending slightly higher, providing short-term technical support.
– The 200-day SMA continues to remain well below current price levels, indicating a longer-term bullish bias.
– Price is trading comfortably above both these averages, suggesting potential for continuation if support holds.
3. **RSI and Momentum Indicators**
– The Relative Strength Index (RSI) remains below overbought levels, currently in the 55–60 range on the daily chart.
– This suggests there is further
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