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Introduction to USD/CAD

The USD/CAD pair, often referred to as the “Loonie,” represents the exchange rate between the United States Dollar (USD) and the Canadian Dollar (CAD). It’s one of the most actively traded currency pairs in the forex market, reflecting the close economic relationship between the United States and Canada. The Loonie is heavily influenced by oil prices since Canada is a major crude oil exporter, while the US remains one of its biggest trading partners. Understanding USD/CAD price movements provides valuable insights for traders, investors, and economists alike.

USD-CAD Market Overview

The USD-CAD pair is showing moderate volatility this week as traders digest multiple delayed US economic reports following the recent government shutdown. The focus remains on today’s US Building Permits and Housing Starts data releases (Jan 9, 2026), which may shed light on the construction sector’s strength after months of reporting disruptions. Additionally, the upcoming Non-Farm Payrolls (NFP) and Unemployment Rate releases on February 6, 2026, are expected to heavily influence the US Dollar’s direction. On the Canadian side, employment and jobless rate data are also set for release on the same day, adding a layer of uncertainty to the pair’s short-term outlook. With recent Federal Reserve speeches from Richmond President Thomas Barkin (Jan 12) and Minneapolis President Neel Kashkari (Jan 14) expected to signal future monetary tightening or dovishness, traders are closely watching USD strength. Overall, global risk sentiment and upcoming macroeconomic data suggest that USD CAD may experience continued fluctuations within its established range as investors await clear policy guidance.

USDCAD Technical Analysis

The USDCAD daily analysis shows a technical correction following the steep decline witnessed during the last weeks of 2025. So far, nearly half of that fall has been retraced as 2026 begins. On the chart, the Alligator indicator displays the blue Jaw (1.38856) flattening horizontally, while the red Teeth (1.38297) and green Lips (1.38073) are curling upward — suggesting that bullish momentum may still be developing but faces resistance. The key support zone is highlighted around 1.36500, reinforced by an ascending green trend line, while the resistance zone sits near 1.41000, marked by a descending red trend line. The Directional Movement Index (DMI 14) shows ADX at 29.71, indicating a moderate trend strength, with +DI (27.28) currently leading over -DI (23.91) — a potential bullish bias. However, the ADXR (31.11) suggests a maturing trend, signaling possible consolidation before a decisive breakout. Price action remains confined within the broader descending channel, so traders should watch for a confirmed breakout above 1.3900 or a rejection back toward 1.3700 for the next directional cue.

Final Words about USD vs CAD

Given the recent technical recovery and the pending fundamental catalysts from both economies, the USD-CAD pair may continue to trade within its medium-term consolidation phase. Traders should monitor US labor data and Fed communications closely for signs of monetary policy direction, as they remain key drivers of USD strength. On the Caadian side, employment reports and oil price trends will be crucial to determining CAD performance. Until a decisive breakout occurs, USD/CAD traders should approach with caution, prioritizing range trading strategies between 1.3650 and 1.4100.

Disclaimer: This USDCAD analysis, provided by Unitedpips, is for informational purposes only and does not constitute trading advice. Always conduct your own Forex analysis before making any trading decisions.