USDCAD Today: Loonie Pins the Pair Below 1.40 as BoC Hike Meets Falling Oil and a Triangle Breakout Looms | Market Outlook | 02 Nov 2026
Market in Focus | USDCAD | Monday 2 November 2026
USDCAD Today: Loonie Pins the Pair Below 1.40 as BoC Hike Meets Falling Oil and a Triangle Breakout Looms
1.39854 +0.00113 (+0.08%) Open 1.39669 · High 1.39876 · Low 1.39627 Daily chart · RSI 38.63 · Captured 07:12 GMT
Desk bias, next 24 hours Mildly bearish Holds while price stays below 1.4060
Market Overview
USDCAD trades at 1.39854, up 0.08%, holding below 1.40 after sliding from a 1.4070 weekly high to a six-week low of 1.3955 and closing Friday near 1.3965. The Bank of Canada’s first hike since 2023 narrowed the yield gap and powered the drop, but the loonie is now stuck in a tightening triangle between 1.3945 and 1.3995. Oil is the brake: WTI near $101 and Brent near $110, both down about 3% on US–Iran talks over reopening Hormuz, while a hawkish Fed and roughly 75% odds of a December hike keep the dollar bid. Today’s ISM at 15:00 GMT and Friday’s US and Canada jobs double-header are the likely triggers for the break. Bias is mildly bearish below 1.4060; a short from 1.3995–1.4030 targets 1.3945 first, and a daily close above 1.4060 voids it.
Key highlights
- Bias: Mildly bearish below 1.4060; RSI 38.63 is under its average but not oversold.
- Levels: Resistance 1.4033 and 1.4047; support 1.3945 and 1.3900.
- Drivers: Oil down about 3% on Hormuz talks; ISM at 15:00 GMT today; US midterms Tuesday; US and Canada jobs together Friday at 13:30 GMT.
USDCAD Technical Summary: Triangle Squeeze Between 1.3945 and 1.3995
- Trend
- A falling line from the October high near 1.432 and a rising line from the September low near 1.375 meet within days, so a breakout is close.
- Averages
- Below 1.4033, 1.4047 and 1.4112; the slow average now acts as resistance.
- Momentum
- RSI 38.63 sits under its 43.63 average and above oversold, leaving room to slide before sellers tire.
Bull vs Bear Signal Board for USDCAD
| Signal | Reading | Lean |
|---|---|---|
| Trend | Squeezed between 1.3945 and the falling line near 1.3995 | Neutral |
| Moving averages | Below 1.4033, 1.4047 and 1.4112 | Bearish |
| Momentum | RSI 38.63, under its 43.63 average, not oversold | Bearish |
| Bank of Canada | Hiked to 2.50%, more flagged; 2-year gap near 128 bp, from 160 | Bearish |
| Oil | Brent near $110, down 2–3% on Hormuz talks | Neutral |
| Fed and US dollar | Held at 3.75%–4.00%; about 75% odds of a December hike | Bullish |
| Risk sentiment | Nasdaq −2.9% on Friday; haven demand for USD | Bullish |
Net score: 2 bullish, 2 neutral, 3 bearish
Next 24 Hours on the GMT Clock
Mon 2 Nov
Canada S&P Global Manufacturing PMI (Oct) Medium
A weak factory read adds to GDP worries after the BoC hike
Mon 2 Nov
US ISM Manufacturing PMI (Oct); forecast 54.7, prior 54.5 High
A hot print and prices paid near 77.9 back the Fed-hike story and lift USDCAD into 1.3995–1.4030
Mon 2 Nov
Fed’s Goolsbee speaks Medium
Any hike talk supports the dollar
Tue 3 Nov
RBA policy decision Low
Sets the commodity-currency tone into Asia
Hormuz talk headlines are unscheduled and can land at any hour; US midterm results arrive overnight into Wednesday.
If-Then Playbook for USDCAD
If price bounces into 1.3995–1.4030
Then go short; targets 1.3945, 1.3900, 1.3800
If price falls to 1.3945 without filling the entry
Then wait for a retest of 1.3995 rather than chase
If a 4-hour candle closes below 1.3945
Then hold for the triangle break toward 1.3900
If the daily candle settles above 1.4060
Then drop the idea; next resistance 1.4112
Catalyst Wire: Fundamental News for USDCAD
Oil slips as US–Iran talks in Doha enter a third day
Brent trades near $110, down about 3%, and WTI near $101, down about 3.5%, after Tehran floated a two-day plan to reopen the Strait of Hormuz. Tanker attacks keep a risk premium in crude. Lower oil trims support for the loonie, but peace progress also eases the energy-inflation case for further BoC hikes.
Bank of Canada hiked to 2.50%, its first rise since July 2023
The 25 bp move was widely expected, and the bank said more increases might be needed to stop energy costs from spreading into broader inflation. Reuters reported that the Canada–US 2-year yield gap narrowed to about 128 bp from 160 bp earlier in October, and USDCAD touched a six-week low near 1.3955 on Friday even as August GDP disappointed.
Source: Reuters, 28–30 Oct 2026
Fed held at 3.75%–4.00% with two dissents for a hike
Lisa Cook and Beth Hammack voted for a 25 bp rise, and the statement said inflation remained elevated. Markets now price roughly a 75% chance of a December hike, keeping the dollar index near 101.8.
Tech rout lifted haven demand for the dollar
Nasdaq fell 2.9% and the S&P 500 fell 1.8% on Friday over AI-spending worries, while gold hit a one-year low. Futures were steadier this morning, but risk appetite remained fragile ahead of Tuesday’s US midterm elections.
Conclusion
Desk verdict Short 1.3995–1.4030; stop above 1.4060
We favour selling a bounce into 1.3995–1.4030, aiming for 1.3945 first. A daily close above 1.4060 cancels the idea, while a four-hour close below 1.3945 breaks the triangle and opens 1.3900. The main risks are a strong ISM print and Fed-hike pricing lifting the dollar, or oil falling further on a Hormuz deal and dragging the loonie with it.
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Frequently Asked Questions
What is the USDCAD outlook for the next 24 hours?
Mildly bearish while price stays below 1.4060, with 1.3945 and 1.3900 as the first downside targets. A break of either triangle line decides the move.
What is the USDCAD trade setup today?
A sell-the-rally short in the 1.3995–1.4030 band, risking about 47 pips for 68 to the first target.
Why is USDCAD near 1.3985 today?
The Bank of Canada’s rate hike narrowed the yield gap and pushed the pair to a six-week low on Friday, while a hawkish Fed, falling oil and risk-off trade are holding the dollar up.
What could move USDCAD this week?
US ISM Manufacturing today, the US midterms on Tuesday, and Friday’s US and Canadian jobs reports at 13:30 GMT, which land together.
