USDCAD climbs to channel limit on soft Canadian CPI

USDCAD continues to climb today, building on the reversal that took shape on February 10–11 after the pair touched the lower limit of the flat. A tug-of-war is now playing out on the charts, with buyers pushing to clear the overhead resistance and sellers digging in to hold the line.

The technical picture points to growing upward momentum within the established channel between 1.34700 and 1.37370—a range that has kept prices boxed in since late January. Today's move reflects some optimism, though approaching the flat ceiling could slow the advance and open the door for a pullback.

In the meantime, technicals are starting to flash caution. The Stochastic Indicator (%K=63, %D=60) sits in neutral territory, yet its lines are currently converging, suggesting that bullish momentum may be stalling, and a correction could be in the cards.

On the flip side, the Chaikin Oscillator—while still positive and pointing to ongoing capital inflows—has turned lower from its February 16 peak even as prices push higher. This bearish divergence waves a yellow flag: buying pressure is quietly fading beneath the surface.

On the fundamental front, the loonie faces modest headwinds. January's softer inflation data have reinforced expectations that the Bank of Canada (BoC) could resume interest rate cuts by July, thus keeping the national currency under pressure.

All eyes now turn to the release of the Federal Reserve's (Fed) January meeting minutes. If the document proves that policymakers are in no rush to ease and remain confident in US economic resilience, the dollar will gain ground, potentially adding fuel to the USDCAD climb.

The plan down below may become part of your trading: 

Buy USDCAD on a pullback toward the 1.35380 support zone. There, the pair is likely to find its footing and resume climbing toward the channel top at 1.37370. Keep in mind that the Fed minutes could be the catalyst for the pair's next leg higher. Place Take profit at 1.37370. Set Stop loss at 1.34700.

This forecast holds true from February 18 till February 26, 2026.