FX.co ★ Blackpink | USD/CAD

USD/CAD remains flat after six straight losses, trading around 1.4015 in today's European session. The pair has entered another pullback below its short- and medium-term EMAs, with an immediate bearish bias. Both the 50- and nine-day EMAs lie above the spot level, indicating that the current move lower has taken the pair below the dynamic trend support levels. The 14-day RSI near 38 also points to negative pressure rather than oversold territory. At the same time, the FXS Fed Sentiment Index near 127 suggests a moderate but stable policy environment. However, in a negative scenario, USD/CAD may fall toward the five-month low of 1.3732, seen on May 21. Additional support comes at 1.3481, the lowest since October 2024. In a positive move, USD/CAD will first move higher toward the 50-day EMA at 1.4069, then the nine-day EMA at 1.4091. Further gains past the moving averages will push the pair towards the 18-month high of 1.4299, seen on October 14. In this respect, Societe Generale strategists have noted that current IMF projections have made the environment more difficult for the Canadian Dollar versus the US Dollar. According to the bank, "with the IMF's US growth forecast revised higher to 2.5% this year (and stable at 2.1% in 2027), the growth gap between the two economies is widening." Even though "the chart below shows relative Bloomberg consensus growth forecasts for 2027," the bank argues that "the IMF's estimate of the growth gap (Canada growing by 1.2% next year vs 2.1% for the US) is even worse for Canada." In this environment, the bank notes that rate spreads also matter, since "the chart on the left" plots the "two-year rate spread versus the USD/CAD."