USD/CAD Price Forecast: Bearish pressure builds below 1.4000
USD/CAD trades on the back foot on Monday even as the US Dollar (USD) regains some ground after weakening last week following softer-than-expected US Nonfarm Payrolls (NFP) data. Attention now turns to Wednesday’s US Consumer Price Index (CPI) report.
The USD/CAD pair is experiencing bearish pressure as it trades below the 1.4000 level, according to TD Securities. This decline was triggered by contrasting US and Canadian labor market outcomes, highlighting the market's focus on central-bank divergence and Canada's domestic outlook. The Canadian Dollar has found support from stronger-than-expected labor data and rising Oil prices, with West Texas Intermediate trading at $80.37 per barrel, up 5.20% on the day.
TD Securities believes the bearish momentum may not persist unless the US CPI also surprises lower, allowing the market to price out near-term Fed rate hiking odds. Technical analysis indicates that USD/CAD has formed lower highs and lower lows since briefly surpassing 1.4200 in late June, holding below the 1.4000 psychological mark and the 50-day SMA at 1.4075.
Momentum indicators favor sellers, with the Relative Strength Index nearing oversold territory and the MACD staying in negative territory. A decisive break below the 200-day SMA around 1.3853 could open the door to a deeper decline.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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