Triple bottom confirms USDCAD reversal toward 1.385

The USDCAD currency pair has been showing steady gains since mid-last week. Prices have rebounded from the 1.357 support level for the third time in a month and half. Unlike previous attempts to break through the 1.375 resistance, the pair closed yesterday’s trading session above this level. As a result, a triple bottom has formed on the daily chart, suggesting an extension of the uptrend toward 1.385.

Another supportive factor for additional upside movement is a breach of the 50-day moving average. This occurred for the first time since March, when quotes were significantly above current levels. Besides, the MACD indicator has returned to positive territory after four months, strengthening a signal to buy the US dollar against its Canadian counterpart. Today is full of statistics. If the price remains above the 1.375 level by the end of the day, it will clearly signal a reversal in USDCAD’s medium-term trend.

On Wednesday, the Bank of Canada and the Fed will hold their monetary policy meetings. Market participants don’t expect any policy changes from either regulator, meaning that all attention will be focused on the comments from Tiff Macklem and Jerome Powell. For the US currency, the situation remains largely unchanged since June: future inflation dynamics are still unclear, as the effects of import tariffs have yet to materialize.

At the same time, the Bank of Canada (BOC) may soon resume interest rate cuts. As Bloomberg analysts note, despite significant progress in US trade negotiations with other countries, the deal with Canada remains unsigned. This puts the loonie at risk, especially if import tariffs exceed 10%. The Canadian dollar may face the same fate as the euro. While 15% tariffs were not the worst-case scenario for the EU, the EURUSD quotes experienced a sharp drop.

Consider the following trading strategy:

Buy USDCAD above the 1.375 level. Take profit: 1.385. Stop loss: 1.368.