USDCAD primed to resume uptrend following key central bank announcements

This week, USDCAD remains trapped in a sideways consolidation pattern between 1.36000 and 1.37000, desperately trying to move higher after bouncing off multi-month lows. The lack of volatility in recent sessions is largely a product of market participants waiting for the Federal Reserve (Fed) and the Bank of Canada (BoC) to make their decisions on April 29.

The American regulator is all but certain to leave interest rates untouched. March's consumer price explosion was the largest in nearly four years. With the labor market refusing to crack and households still spending freely, the central bank has no excuse to ease. To top it off, the previous meeting's minutes contained hints about a rate hike, and the latest inflation flare-up—driven by sky-high oil prices—only cranks up those arguments. Such an environment creates a supportive undercurrent for the US dollar. 

The BoC, in stark contrast, finds itself in a policy trap. It is holding borrowing costs steady while trying to balance a modest acceleration in inflation to 2.4% with clear signs of economic weakness. This toxic mix makes a tough stance nearly impossible, casting a dark cloud over the Canadian dollar.

Matters are made worse for the loonie by a seismic shift in the oil landscape. The United Arab Emirates' (UAE) departure from OPEC could swell global supply and knock fuel prices off their perch, undercutting the CAD's traditional role as a proxy for commodities. 

Geopolitical headwinds are also blowing hard. With peace talks being at a standstill and the US President ordering preparations for a prolonged naval blockade, the greenback is basking in safe-haven demand. 

On the charts, the prevailing downtrend is slowly waving the white flag, giving way to a flat trend with tentative attempts at a local upside reversal. Technicals are sounding the alarm: the Relative Strength Index (RSI) has turned north and clawed its way out of oversold territory to 31, screaming that sellers are exhausted. Meanwhile, the Chaikin Oscillator has crossed the zero line and entered a positive zone, signaling that fresh capital is flowing in and bulls are in control.

For those eager to make a move, consider the trading plan down below:

Buy USDCAD at the current price (1.36880). Place Take profit at 1.38100 and Stop loss at 1.35900.

This forecast holds true from April 29 till May 6, 2026.