USD/CAD stabilised near 1.4010 in Asian trading on Friday after six consecutive declines, remaining below its short- and medium-term moving averages and retaining a bearish near-term bias. With spot under both the 50-day EMA at 1.4069 and the nine-day EMA at 1.4091, those levels are acting as overhead barriers. Momentum remains soft: the 14-day RSI is around 38, while the FXS Fed Sentiment Index near 127 suggests a subdued but steady policy backdrop that has not shifted the technical tone.
Technical Overview and Momentum Indicators
On support, the pair is drifting towards the five-month low of 1.3732 set on 21 May, with a deeper floor at 1.3481, the lowest level since October 2024. If USD/CAD reclaims the 50-day EMA and then the nine-day EMA, attention turns to the 18-month high of 1.4299 from 14 October.
Macroeconomic Factors and Growth Outlook
Separately, IMF revisions point to a wider US–Canada growth gap, with the US forecast lifted to 2.5% this year and held at 2.1% in 2027; Canada is seen at 1.2% next year versus 2.1% for the US, alongside an emphasis on the two-year rate differential as an input into the pair’s direction.
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