USD/CAD holds firm as mixed trade headlines cloud USD outlook

Source Fxstreet
  • USD/CAD trades near the 1.3900 zone in a tight range ahead of the weekend
  • Contradictory US-China tariff headlines and resilient oil prices shape sentiment
  • Resistance is seen at 1.3893 and 1.3986, with support at 1.3855

The USD/CAD pair holds steady around the 1.3900 zone on Friday as markets weigh fresh US-China trade headlines and stronger oil prices against a firmer Greenback. The US Dollar Index (DXY) is trading higher near 99.60, supported by comments from US President Donald Trump suggesting talks with China are ongoing. However, these claims were quickly disputed by the Chinese Foreign Ministry, which said no negotiations were underway, creating confusion and limiting bullish follow-through in USD/CAD.

The mood remains fragile as traders digest mixed trade signals. While Trump claimed progress on negotiations with Beijing, China firmly denied any ongoing tariff consultations, emphasizing that the US should “stop creating confusion.” This contradiction has kept risk appetite in check, weighing on US equity futures and tempering the DXY’s recent rebound.

Oil prices remain a supportive factor for the Canadian Dollar. Brent crude hovers above $68 per barrel after surging earlier this week, buoyed by US sanctions on Iranian oil and reports that China may reduce certain US import tariffs. While OPEC+ production increases are expected in May and possibly June, their net effect is likely to remain limited if offset by compensatory cuts, according to Commerzbank analysts.

Technical outlook


USD/CAD is flashing an overall bearish signal, trading flat near 1.3900 and consolidating within the intraday range of 1.3846 to 1.3893. The Relative Strength Index (RSI) sits neutrally at 36, while the Moving Average Convergence Divergence (MACD) shows a sell signal, hinting at downward pressure.

Momentum indicators are mixed. The Stochastic RSI Fast (near 41) and the Bull Bear Power (close to 0) both suggest indecision, failing to confirm a directional bias. However, trend-following signals remain bearish. The 20-day, 100-day, and 200-day Simple Moving Averages at 1.4017, 1.4270, and 1.4009 respectively all slope lower, reinforcing the negative tone. Bearish cues are also seen in the 10-day EMA at 1.3893 and the 10-day SMA at 1.3863.

Support rests at 1.3855, just above this week’s low. A break below would expose 1.3800 and 1.3745 next. On the upside, resistance is found at 1.3863, 1.3893, and the psychological 1.3986 zone. Unless USD strength regains momentum or oil prices pull back sharply, the bias for USD/CAD remains skewed to the downside.


Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: Gold Returns to $4,200 Ahead of US September CPI, Can the Rally Continue?As of the Asian session on October 12, gold prices (XAUUSD) consolidated at high levels following a sharp rebound last week. As of press time, gold prices were down slightly by 0.2%, trad
Author  TradingKey
8 hours ago
As of the Asian session on October 12, gold prices (XAUUSD) consolidated at high levels following a sharp rebound last week. As of press time, gold prices were down slightly by 0.2%, trad
placeholder
Bank earnings kick off tomorrow with the S&P 500 seven points from a record — what JPMorgan, Goldman, Citi and Wells Fargo must proveQ3 earnings season starts Tuesday with JPMorgan, Goldman Sachs, Citigroup and Wells Fargo reporting before the open — with the S&P 500 just 7 points from its record close, bank stocks down 7.5% over the past month, and September CPI landing the next day. Here are the numbers to watch, the two-sided setup and the levels that matter.
Author  Irene Q.
12 hours ago
Q3 earnings season starts Tuesday with JPMorgan, Goldman Sachs, Citigroup and Wells Fargo reporting before the open — with the S&P 500 just 7 points from its record close, bank stocks down 7.5% over the past month, and September CPI landing the next day. Here are the numbers to watch, the two-sided setup and the levels that matter.
placeholder
Brent swings $105.63 to $102.33 as Gulf risk meets an 'energy ceasefire' — can $100 hold into CPI?Brent spiked to $105.63 in Asian trade on fresh Middle East supply incidents, then reversed to $102.33 after the US announced a Russia-Ukraine 'energy ceasefire' and 300,000+ tonnes of Russian diesel headed to global markets; WTI fell through $90. Here are the drivers, the levels and the scenarios into Wednesday's US CPI.
Author  Irene Q.
13 hours ago
Brent spiked to $105.63 in Asian trade on fresh Middle East supply incidents, then reversed to $102.33 after the US announced a Russia-Ukraine 'energy ceasefire' and 300,000+ tonnes of Russian diesel headed to global markets; WTI fell through $90. Here are the drivers, the levels and the scenarios into Wednesday's US CPI.
placeholder
WTI declines to near $90.00 despite escalating Middle East conflict, supply risksWest Texas Intermediate (WTI) declines after two days of gains, trading around $90.00 per barrel during Asian hours on Monday.
Author  FXStreet
17 hours ago
West Texas Intermediate (WTI) declines after two days of gains, trading around $90.00 per barrel during Asian hours on Monday.
placeholder
Gold posts first weekly gain in three weeks — can $4,200 hold through CPI?Spot gold closed at $4,194.645, up 1.47% — its first weekly gain in three weeks — and COMEX futures settled back above $4,200 at $4,220.30. Here are the drivers, the levels and the scenarios into Wednesday's CPI.
Author  Irene Q.
Oct 10, Sat
Spot gold closed at $4,194.645, up 1.47% — its first weekly gain in three weeks — and COMEX futures settled back above $4,200 at $4,220.30. Here are the drivers, the levels and the scenarios into Wednesday's CPI.
Related Instrument
goTop
quote