Insights 
VT 
Testing Support Levels
The pair currently tests support at approximately 1.3980, the ascending channel’s lower boundary. A decisive drop below this boundary could pressure USD/CAD to test the 50-day EMA at 1.3907. Further declines may affect medium-term momentum, with possible dips towards the three-month low of 1.3721.
The Canadian Dollar’s strength varies against major currencies today, particularly strong next to the Japanese Yen. A heat map illustrates these currency fluctuations, with the Canadian Dollar as the base currency against others.
As of today, October 23, 2025, we see the USD/CAD pair at a critical point, testing the lower boundary of its ascending channel around 1.3980. While the broader trend remains bullish, short-term momentum is showing signs of weakness. This suggests that the next few trading sessions will be decisive for the direction into November.
Opportunity for Derivative Traders
The fundamental picture supports a stronger US dollar, which makes shorting the pair a risky move. The recent US Consumer Price Index data for September 2025 came in slightly above expectations at 3.8%, keeping pressure on the Federal Reserve to maintain its hawkish stance. This contrasts with the Bank of Canada, which has signaled it is firmly on hold due to a cooling domestic economy.
Furthermore, we’ve seen West Texas Intermediate crude oil prices slip to around $82 a barrel this month on global growth fears, weighing on the Canadian dollar. This divergence between a firm US economic outlook and a softer Canadian one reinforces the potential for the pair to move higher. A similar pattern was observed back in the fall of 2022 when aggressive Fed policy drove significant USD/CAD gains.
For derivative traders, this presents a clear opportunity if the 1.3980 support level holds. We would consider buying call options with a strike price at or above the psychological 1.4000 level, targeting a retest of the recent high of 1.4079. However, a convincing break below this channel would signal a trend change, making put options with a strike around 1.3950 a sensible hedge against a deeper move down toward the 1.3900 area.
