USDCAD experienced an upward movement this week, marked by a narrow trading range of 70–75 pips. The weekly low was reached on Monday, while the high was recorded on Thursday near a previous swing high from August 1.
Today’s slight pullback tested the rising 100-hour moving average at 1.37807, but only dropped to 1.3788 before modestly rebounding. Throughout Monday to Thursday, the price oscillated around the 100-day moving average, acting as a magnet rather than as support or resistance.
Buyers Gain Slight Advantage
Yesterday’s breakout above this level, currently at 1.37707, is holding, giving a slight advantage to buyers. As we approach next week, the bias remains towards an upward trend if the price stays above the 100-day moving average.
If the price surpasses the week’s high of 1.38193, it targets a further increase towards the previous high of 1.38788. Conversely, falling below the 100-day moving average would see the sellers regain control from a technical standpoint.
We have seen the USDCAD move higher this past week, but with buyers and sellers in a tight battle, the action has been contained. The price holding above the 100-day moving average at 1.37707 gives buyers a slight advantage heading into the coming weeks. For now, this suggests a strategy of buying on dips is favored.
This slight upward bias is supported by recent economic data released in August 2025. The latest US CPI data showed inflation remains persistent at 3.4%, while Canada’s job report revealed an unexpected rise in unemployment to 6.2%. This divergence suggests the US Federal Reserve may remain more firm on its policy stance than the Bank of Canada.
Impact of Economic Indicators and Oil Prices
Adding to this, we have seen WTI crude oil prices soften, recently trading below $75 a barrel, which is often a headwind for the Canadian currency. We remember the policy divergences between the central banks back in 2024, which often led to sustained trends in this pair. This current setup feels familiar, suggesting a trend could be developing.
For derivative traders considering call options or long futures contracts, the first upside target is the recent high near 1.3819. A successful break of that level would bring the high from the first week of August 2025 into play at 1.38788. The analysis suggests there is room for the pair to move higher if momentum builds.
On the other hand, the 100-day moving average is the critical level to watch for risk management. A distinct move back below 1.37707 would indicate sellers have regained control of the market. Such a break would be a clear signal to consider protective put options or exit any long positions.
