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Introduction to USD/CAD

The USDCAD is one of the most significant pairs in the forex market, representing the trade relationship between two North American giants. Known as the “Loonie,” it is famously sensitive to the price of crude oil, which is Canada’s primary export. This pair often serves as a barometer for the health of the broader North American economy and shifts in global risk sentiment.

USD CAD Market Overview

The USD/CAD is currently influenced by a “wait-and-see” mood as traders focus on the World Economic Forum in Davos. US President Donald Trump is set to speak today, January 21, 2026, with markets watching for comments on trade and tariffs that could shift the Greenback’s value. Recently, US data releases like Construction Spending and Pending Home Sales have faced delays due to a government shutdown, creating some uncertainty in the housing sector. Meanwhile, the Canadian Dollar is navigating steady but elevated inflation data, leading markets to expect the Bank of Canada to hold interest rates steady. Tomorrow, the pair’s direction will likely be dictated by the aftermath of the Davos headlines and the weekly API crude oil inventory report.

USDCAD Technical Analysis

Technically, the USD/CAD is moving along a bearish trend line after completing a brief upward correction. The daily candles have recently turned lower, indicating that the downward momentum may be resuming toward key Fibonacci extension levels at 1.37111 and 1.35885. The Williams Alligator is beginning to point downward, suggesting a potential trend shift, while the Aroon (14) indicator shows the bullish strength is starting to fade. Additionally, the Awesome Oscillator has shifted to red bars, confirming a decrease in buying pressure.

Final Words about USD vs CAD

The outlook for the US Dollar vs Canadian Dollar remains bearish as the price fails to break through the $1.3900$ resistance zone. Traders should watch President Trump’s upcoming speech and the Davos forum closely, as any aggressive trade rhetoric could spark sudden volatility. If the Loonie gains support from stable oil prices, we could see a steady move toward the 1.3700 support level. Overall, maintaining a disciplined approach is key while navigating the high-impact news scheduled for this week.

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.