USD/CAD Stays Near 20-Day EMA as Dollar Weakens
On Thursday morning, the USD/CAD pair dropped to around 1.3718 during early trading in Asia. The U.S. dollar weakened after Donald Trump repeated his threat to remove Federal Reserve Chair Jerome Powell. This added pressure to the dollar, although the Canadian dollar also stayed soft.
At the moment, USD/CAD is moving close to its 20-day Exponential Moving Average (EMA) around 1.3717. This shows that the pair is moving sideways and not showing a strong trend. The Relative Strength Index (RSI), which measures momentum, is between 40 and 60, suggesting there is not much volatility or strong direction.
In Canada, inflation is still below the Bank of Canada’s 2% target. The headline Consumer Price Index (CPI) is at 1.7%, while core inflation is at 2.5%. This keeps hopes alive that the central bank might cut interest rates soon.
If the USD/CAD pair goes above the recent high of 1.3820, the next targets could be 1.3920 and even 1.4000. But if it falls below the June low of 1.3540, it could slide toward 1.3500 or even 1.3420.
Impact:
USD/CAD might stay in a tight range for now. It could rise if the U.S. dollar recovers or fall further if the Bank of Canada hints at rate cuts.