CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
✖

USD CAD surges to approach critical level

By :   Global author , Financial Analyst
October 31, 2017 4:04 PM

The past several weeks have not been kind to the Canadian dollar. Less than two weeks ago, key Canadian inflation and retail sales data were released that were significantly lower than expected, which did not bode well for further monetary policy tightening by the data-dependent Bank of Canada. Last week, the BoC indeed held interest rates steady as widely expected, after previously raising rates back-to-back over the summer, but also issued a dovish statement that focused on caution amid uncertainties. These uncertainties included the NAFTA renegotiation, lagging wage growth in the labor market, and lower projections for export growth, housing, and consumption. Most recently, Tuesday saw the release of Canadian GDP figures for August, which came out negative for the first time this year at -0.1%, missing forecasts of +0.1%. This combination of economic data and central bank factors has placed substantial pressure on the Canadian dollar.

The general rise and recovery of the US dollar since early September has combined with this recent Canadian dollar weakness to boost USD/CAD in a sharp uptrend within the past two months. On Tuesday, the currency pair rose once again to approach a major resistance area around: the critical 1.3000 psychological resistance level; 50% of the May-September downtrend; and the 200-day moving average. Most importantly, the 1.3000 resistance level holds major technical significance.

Several key upcoming events that will drive the US dollar this week include Wednesday’s FOMC decision and Friday’s US jobs report. For the Canadian dollar, Friday will also feature Canada’s jobs report. Amid these employment data releases and indications of the Fed’s policy stance via the FOMC statement, the policy contrast/divergence between the Fed and BoC could become even clearer, potentially furthering USD/CAD’s recent bullish run. With any significant breakout above the noted 1.3000 resistance level, the next major upside target resides around the key 1.3200 resistance area.

StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.


This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.

© FOREX.COM 2026