USD/CAD: Bulls Regain Control as 1.4100 Comes Into Focus

USD/CAD rose roughly 0.3% on Tuesday, reaching 1.4078, as the Canadian Dollar weakened to its lowest level since August 5. The American 2-year yield advantage widened to approximately 148-bps, its largest since March 2025. Renewed Fed tightening expectations likewise supported the U.S. Dollar. Geopolitics is likewise in the driver’s seat. For the BOC, the policy outlook is increasingly complicated. Governor Tiff Macklem warned that new U.S. tariffs could cut fourth-quarter Canadian growth below 1%, even as inflation remains at 3%. Markets now assign roughly 60% probability to an October hike. The combination of deteriorating trade prospects, persistent energy inflation, and widening rate differentials is keeping pressure on the Canadian Dollar despite the prospect of additional BOC tightening. 

USD/CAD Daily Price History

USD/CAD is putting together a convincing recovery. The pair has rallied from the September lows near 1.3750, reclaimed its entire moving-average cluster, and is now testing the 1.4070 area. The broader technical structure has improved considerably since the summer correction. The descending trendline from the March 2025 highs has been broken, and the latest recovery reinforces that earlier breakout. Buyers have regained control of the intermediate trend, with price now trading above all key moving averages. The immediate obstacle is 1.4070-1.4100. That area has repeatedly attracted sellers throughout the year, making it the first serious test of the current advance. A daily close above 1.4100 would strengthen the bullish structure and open the door toward 1.4200-1.4250, where the summer rally exhausted itself.

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