The USDCAD pair is gradually regaining its upward momentum after a period of consolidation. Buyers keep prices above the key support level of 1.37400, setting the stage for another test of 1.37726. The market is now in an accumulation phase following a recent rally from the local low of 1.35490. Volatility is fading, and candlestick bodies are getting shorter, signaling subdued activity. The pair is currently hovering around 1.37565.
The Alligator Indicator remains the key one to watch. It has been forming a classic bullish pattern since its lines converged. On May 18, the green and red bands crossed, and on May 20, the green strip rose above the blue one. Simply put, this means the correction is over and another leg higher is on the way. If the red line jumps above the blue one, the “Hungry Alligator” structure will be fully confirmed. In this case, expect new highs.
The Chaikin Oscillator is also bullish. The indicator remains in positive territory, despite its recent decline on May 15. In other words, the slowdown in momentum has not significantly hurt purchasing volumes.
The Stochastic Oscillator is no exception, joining the buyers’ side. Its lines diverge within a neutrally bullish zone, staying safely away from overbought levels above 80. Despite the bearish crossover, the indicator suggests that the market is cooling off within a flat trend rather than reversing lower.
Fundamental factors continue to underpin the US dollar. The Federal Reserve (Fed) is expected to maintain its hawkish posture due to rising inflation risks triggered by elevated oil costs and the ongoing Iranian conflict. The loonie, by contrast, finds itself under extreme pressure after Canada’s Consumer Price Index (CPI) report came in below forecasts. This data casts doubt on the likelihood of further monetary tightening by the national central bank.
Pay attention to the following trading plan:
Buy USDCAD at the current price. Place Take profit at 1.38350. Set Stop loss at 1.37100.
The forecast is valid from May 20 till May 27, 2026.
This content is for informational purposes only and is not intended to be investing advice.
