USDCAD Analysis

Introduction

The USD/CAD pair is closely tied to the price of oil, as Canada is a major oil exporter. The price of crude oil often influences the CAD’s strength, with the Canadian Dollar typically appreciating when oil prices rise. The Bank of Canada (BoC) influences the currency through interest rate decisions and its economic outlook. Additionally, the USD/CAD is impacted by US economic performance and trade relations between the US and Canada.

Fundamentals and Interest Rates

The Federal Reserve policy is Dovish with the (FED) current Interest rate 3.75%. Latest change was Dec 10, 2025 (-25bp)%.
On that side the Bank of Canada policy is Dovish and (BOC) has set its interest rate to 2.25% by latest change, Oct 29, 2025 (-25bp).
(FED) Higher interest rates generally lead to higher returns on investments denominated in USD. This tends to attract foreign capital into USD assets.

Based on the economic and macro fundamental data, The Fundamental Bias of USD is Strong Bullish and for the CAD is -- Neutral.
Ziwox considering Moderate Bullish bias for this asset and we anticipate long-term price increases.
mid-term Fundamental Score for USD is 11. and Fundamental Score for CAD is 4. So, base on the Fundamental Score, we predict mid-term upside price movement.

Market Overview & Performance

In the current trading session, "Tokyo & London", Market risk sentiment is Mix. The Gold and Australian dollar recorded the strongest performance, while the Canadian Dollar and New Zealand Dollar are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a 1.25% increase against us dollar.
Euro "EUR", performance has been 0.03% up so far
Pond "GBP", performance has been 0.09% up as of now
Australian dollar "AUD", has risen by 0.13%
New Zealand dollar "NZD", has dropped by -0.08%
Japanese YEN "JPY", experienced -0.03% fall
Swiss franc "CHF", experienced 0.1% rise so far
Canadian dollar "CAD", has lost -0.08%

Market Sentiment and Positioning

USD COT (Commitments of Traders):

Institutions Net Position on >U.S. Dollar Index is 3758 included 24584 long, 20826 short and 2908 position changed from last week.
So they mainly have a bullish view on this asset and bought USD for higher prices in long-term.
Last week 2908 repositioning Indicates that they are optimistic about higher prices in mid-term.

CAD COT (Commitments of Traders):

Institutions Net Position on >Canadian Dollar is -94111 included 37723 long, 131834 short and -25229 position changed from last week.
So they mainly have a bearish view on this asset and sold CAD for lower prices in long-term.
Last week -25229 repositioning Indicates more sell positions and price pressure in short-term.

Retail Traders:

Crowd traders or Retail traders are bullish on the USDCAD with 62% 38% ratio. 0 long pos and 0 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability USDCAD prices may decrease.

Technical Levels and Support/Resistance

The USDCAD pair is approaching a critical technical support level near 1.38587.
Technical trend is BUY, If the pair continues to weaken, this support could become a good area to enter a long positions.
On the upside, there is key resistance near 1.39925. Technically, A break above this resistance could signal a shift in momentum, but need to get a confirmation in this area due to the reversal or correction potential.