• The USD/CAD forecast suggests a mild upside as the US dollar gains momentum following the shutdown’s end.
• The uptick in WTI and Canada’s strong employment data could not lend support to the loonie. 
• US yields and rate cut expectations could further shape the markets. 

The USD/CAD forecast suggests a slight bullish momentum, trading well above the 1.4000 psychological mark. Earlier, the CAD strengthened amid fresh buying in crude oil prices, driven by rising geopolitical tensions between Russia and Ukraine. 

The WTI rally continued in the second straight session and stood near $59.50, capping the gains in USD/CAD. Meanwhile, last week’s upbeat employment data and the Bank of Canada’s cautious tone towards monetary easing have investors reassessing their bets of further easing in the near term, lifting the Loonie. 

However, Governor Macklem’s commentary suggests the existing rates can’t support the economy further due to the ongoing US economic challenges. 

From the US, the dollar gained amid higher treasury yields and reduced expectations of Fed easing. However, the US struggles with economic caution that overshadows the risk-on mood after the shutdown’s end. 

Kevin Hassett and other officials have hinted that some of the key October releases may never materialize. Meanwhile, the Fedspeak gave hawkish remarks. Markets are pricing in a 50% probability of a Fed cut, down from 69% a week ago. 
 

USD/CAD Daily Key Events

The significant events in the day include:

• CAD Manufacturing sales m/m
• CAD Wholesale sales m/m
• FOMC Member Schmid Speaks

On Friday, traders look forward to CAD manufacturing sales and wholesale sales, as well as FOMC Chair Schmid’s speech, to find directional bias. 
 

USD/CAD Technical Forecast: Mild Bullish Bias Persists Near 1.4040
 

(Click on image to enlarge)

USD/CAD 4-hour chart
 

The USD/CAD 4-hour chart shows the consolidation within key MAs. The price stays near the 50-period MA but remains below the 100- and 200-period MAs, highlighting a neutral bias unless a clear breakout occurs.  

The RSI stands near 53, indicating mild bullish momentum. However, the upside lacks follow-through momentum. Bulls need to break above 1.4055 to trigger a fresh uptick move. Conversely, bears could dominate if the pair breaks below 1.4000, extending the downside further.  
 

Support Levels

• 1.4000
• 1.3985
• 1.3950
   

Resistance Levels

• 1.4055
• 1.4090
• 1.4130

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