USDCAD hovers near lower boundary of ascending channel

USDCAD is pulling back from the November 18 peak of 1.40610, signaling waning bullish momentum and increasing seller activity. The price is currently hovering around 1.39950, showing no clear direction after a period of significant downward pressure.

Technical indicators confirm this picture. The Stochastic Oscillator (%K=40, %D=41) is in neutral territory, but a recent bearish crossover and its proximity to the oversold zone shows that bulls are losing their ground. The Chaikin Oscillator points to capital outflows following the peak on November 17, which aligns with the observed decline and a potential reversal pattern forming on the daily chart. The November 19 candlestick with a minimal body and narrow range confirms reduced market activity at these levels.

Nevertheless, the price is now approaching the lower boundary of the ascending channel, within which USDCAD has moved since August. A technical rebound is likely.

Earlier this week, the Canadian dollar found support after parliament backed Prime Minister Carney's budget proposal. The removal of this key political risk provided momentum for the loonie. In addition, core inflation remains stable, allowing the central bank to maintain a wait-and-see approach on interest rates. This also underpins the national currency.

However, some headwinds persist. Oil price dynamics are weighing on the Canadian dollar, as crude is key for the country’s exports. Goldman Sachs analysts forecast Brent will plummet to $56 per barrel in 2026. This is a dark cloud hanging over commodity-related currencies, including the loonie.

As for the US dollar, it derives strong support from the Federal Reserve’s (Fed) hawkish monetary policy stance. The substantial yield gap between US and Canadian bonds continues to fuel demand for the greenback.

Take a look at the following trading plan:

Buy USDCAD at the current price, with Take profit at 1.41000 and Stop loss at 1.39400.

This forecast remains relevant between November 19 and November 26, 2025.