USD/CAD Holds Steady Near 1.4100 as USD Momentum Fades

Fundamental Overview

USD/CAD is trading flat around 1.4100, unable to break above last week’s high at 1.4130. Monday’s session remains directionless as mild risk appetite pressures the U.S. Dollar.

The USD weakened on Friday after dovish comments from New York Fed President John Williams, who signaled that the Fed still has room to cut rates without risking inflation progress. His remarks boosted risk sentiment and softened the Dollar, overshadowing upbeat U.S. business activity data and stronger consumer sentiment figures.

Following Williams’ comments, market odds for a 25 bps December rate cut surged to 75%, up from 40% a week earlier. The shift is weighing on the Dollar, although downside remains limited as traders acknowledge strong divisions within the FOMC, making the December decision highly uncertain.

USD/CAD Technical Analysis – Daily Chart

Technical Overview

• USD/CAD trades within an up channel.
• Price remains above all major SMAs, signaling sustained bullish momentum.
• RSI remains in the bullish zone, while Stochastic shows a neutral trend.
• Immediate Resistance: 1.4142
• Immediate Support: 1.4055

How to Trade USD/CAD

The pair stabilized after a broader decline, found support, and rebounded strongly—breaking above a major resistance zone. A retest of this area held firm near a key Fibonacci level. The pair is now facing mild upside rejection, hinting at a short-term pullback toward support. If this zone holds, USD/CAD could regain upward momentum and resume its bullish structure.

Trade Suggestion:
Limit Buy: 1.4079
Take Profit: 1.4140
Stop Loss: 1.4055

Frequently Asked Questions (FAQ)

Q1: Why is USD/CAD moving sideways today?
Lack of major data and mild risk appetite are keeping the pair range-bound.

Q2: What caused the USD to weaken?
Dovish comments from Fed’s Williams increased expectations of a December rate cut.

Q3: How likely is a December Fed rate cut?
Market odds are now around 75%, up sharply from last week.

Q4: What key levels should traders watch?
Support at 1.4055 and resistance at 1.4142.

Q5: What is the short-term trading bias?
Bullish, as long as price remains above the newly formed support zone.

Disclaimer

This analysis is for informational purposes only and does not constitute financial advice. Markets are volatile, and trading involves risk. Always perform your own analysis or consult a licensed financial professional before entering trades.