USD/CAD Price Forecast: Can 1.4000 support hold after a drop below the 50-day EMA?

Further weakness in USD/CAD could bring the five-month low of 1.3732 into view.
Downward pressure appears persistent, with the 14-day Relative Strength Index at 39.
At 1.4072, the 50-day EMA marks the first resistance level.

A bearish near-term outlook continues to weigh on USD/CAD, which remains below its 50- and nine-day Exponential Moving Averages (EMAs). Trading near 1.4020 in Thursday’s European session, the pair is extending its decline for a sixth consecutive day.

Despite the FXS Fed Sentiment Index easing from earlier extremes, USD/CAD’s retreat from recent highs is accompanied by signs of sustained downward pressure rather than an approaching reversal. The 14-day Relative Strength Index (RSI), at around 39, continues to move towards oversold territory.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Should USD/CAD weaken further, it may approach the area around 1.3732, the five-month low reached on 21 May. Below that, support is located at 1.3481, the lowest level since October 2024.

A recovery in USD/CAD could bring an initial test of the 50-day EMA at 1.4072 before the nine-day EMA at 1.4113 comes into focus. A move above both averages would support a test of 1.4299, the 18-month high registered on 14 October.

USD/CAD: What Does the Daily Chart Indicate?

Why is USD/CAD under pressure as the IMF flags a widening North American growth gap?

The latest IMF forecasts point to an increasing divergence in North American growth prospects, according to strategists at Societe Generale. They note that “with the IMF’s US growth forecast revised up to 2.5% this year (while remaining at 2.1% in 2027), the North American growth gap is widening.” Contrasting the IMF assessment with consensus estimates, they observe that “the chart on the right shows relative Bloomberg consensus growth forecasts for 2027,” while the IMF outlook is “even less favourable for Canada,” projecting “1.2% growth in Canada next year versus 2.1% in the US.” They also note that “the chart on the left shows the two-year rate differential plotted against USD/CAD,” highlighting the continuing role of relative growth expectations and short-end rate spreads in shaping the Canadian Dollar’s performance against the US Dollar.

(An AI tool assisted in preparing the technical analysis in this article. Find out more.)

How Is the Canadian Dollar Performing Today?

The Canadian Dollar recorded its strongest performance against the New Zealand Dollar today. The table below presents the Canadian Dollar’s (CAD) percentage movements against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.05%	-0.09%	-0.75%	-0.21%	0.18%	0.23%	-0.59%
EUR	0.05%		-0.06%	-0.72%	-0.20%	0.23%	0.28%	-0.56%
GBP	0.09%	0.06%		-0.65%	-0.15%	0.27%	0.32%	-0.50%
JPY	0.75%	0.72%	0.65%		0.52%	0.93%	0.95%	0.15%
CAD	0.21%	0.20%	0.15%	-0.52%		0.40%	0.47%	-0.37%
AUD	-0.18%	-0.23%	-0.27%	-0.93%	-0.40%		0.04%	-0.77%
NZD	-0.23%	-0.28%	-0.32%	-0.95%	-0.47%	-0.04%		-0.79%
CHF	0.59%	0.56%	0.50%	-0.15%	0.37%	0.77%	0.79%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency from the left-hand column and the quote currency from the top row. To read CAD (base)/USD (quote), for instance, start with the Canadian Dollar in the left-hand column and follow that row across to the US Dollar column; the intersecting cell gives the percentage change for that pair.