USD/CAD is approaching a seven-month high of 1.4079. It is currently trading around 1.4060 and showing a strong upward trend. The short-term momentum of the pair is solid, exceeding the nine-day Exponential Moving Average (EMA). The 14-day Relative Strength Index is close to 70, suggesting further potential for growth. If USD/CAD breaks past 1.4079 and the major level of 1.4100, the next target may be around 1.4210. For support, we see the nine-day EMA at 1.4013 and the key level of 1.4000. If the price falls below these points, it might lead to more losses down to the 50-day EMA at 1.3933, and then to about 1.3920. The percentage changes indicate that the CAD is the weakest compared to the Japanese Yen. For example, the USD/CAD shows a minor change of 0.04%, which represents small daily shifts. The table below displays these changes, using the base currency on the left and the quote currency on the top. For instance, CAD’s position against USD shows a 0.04% change, reflecting current market activity.

Akhtar Faruqui is known for his detailed Forex analyses, focusing on market trends and financial dynamics. Based in New Delhi, India, he provides in-depth news and analysis to help understand market movements better. We are witnessing a clear upward trend for the US dollar against the Canadian dollar, with the pair getting closer to a significant seven-month high. The momentum suggests that breaking above the 1.4100 level is quite likely in the coming weeks. This is backed by technical strength, as the Relative Strength Index still has room to increase before reaching an overbought condition. This market behavior is largely affected by differing approaches of the central banks, a key theme for us throughout 2025. The recent US inflation data from October showed a steady rate of 3.4%, supporting the Federal Reserve’s intention to keep interest rates high. Meanwhile, the Bank of Canada encounters a softer economy, with Canadian inflation dropping to 2.9% and rising concerns about the housing market. Additionally, the Canadian dollar is weakened by low commodity prices. West Texas Intermediate crude oil, a major Canadian export, is having difficulty staying above $85 per barrel due to worries about global demand. This situation contrasts with the overall strength of the US dollar, which has been rising against most other major currencies recently. For those trading derivatives, this suggests that buying USD/CAD call options may be a wise strategy. Targeting strike prices near 1.4100 or 1.4150 positions us to take advantage of a move towards the 1.4210 resistance level. This tactic allows us to benefit from the expected rise while managing our risk effectively. However, we need to keep an eye on the 1.4000 psychological level, which is a key support. A strong drop below this point could undermine the short-term bullish outlook and lead to a sell-off. We’ve seen sharp reversals from these levels before, particularly in the spring of 2020, reminding us that there can be increased volatility at these highs.

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