The U.S. Dollar to Canadian Dollar (USD/CAD) pair maintained a modest upward bias on Monday, trading around 1.4040, up 0.20% on the day. However, its momentum appeared to stall just below the 1.4050 resistance level as traders weighed the competing forces of Federal Reserve policy signals, weakening oil prices, and prolonged political uncertainty in Washington.

The Loonie’s struggle to regain ground comes as the broader market narrative tilts in favor of the greenback. A cautious yet hawkish tone from the Federal Reserve has helped bolster the U.S. Dollar, which continues to benefit from shifting interest rate expectations. Meanwhile, a steep retreat in oil prices—Canada’s most critical export—has further eroded the Canadian Dollar’s short-term outlook, leaving it vulnerable to further downside pressure.

Following last week’s Federal Reserve policy meeting, Chair Jerome Powell adopted a more guarded approach to rate cuts, pushing back against market speculation of further monetary easing this year. During his post-meeting press conference, Powell said that another rate cut in 2025 was “far from certain,” stressing that policymakers needed to wait for the resumption of official economic data amid the ongoing U.S. government shutdown.

This shift in rhetoric triggered a recalibration in market expectations. The CME FedWatch Tool now shows the probability of a 25-basis-point rate cut in December falling to 69%, down sharply from over 90% before the meeting. The change underscores growing uncertainty about the Fed’s next move, especially as inflation remains sticky and labor market resilience tempers calls for aggressive easing.

The result has been a stronger U.S. Dollar across the board, supported by cautious risk sentiment. As the U.S. government shutdown drags into its sixth week—the longest in modern history—investors remain wary of the potential drag on growth and consumer confidence. Yet paradoxically, this political deadlock has reinforced safe-haven flows into the greenback, contrasting with the weakness seen in commodity-linked currencies like the Canadian Dollar and Australian Dollar.

Crude oil, Canada’s lifeblood export, remains under pressure. West Texas Intermediate (WTI) futures retreated toward $60.50 per barrel after briefly breaching $61 earlier in the session, erasing earlier gains fueled by geopolitical jitters and OPEC+’s production plans. Although the cartel confirmed it would pause planned output increases starting in early 2026, the rally faded as the U.S. Dollar strengthened and demand concerns resurfaced.

The recent slide in oil highlights how global energy markets remain highly sensitive to U.S. policy and demand indicators. With China’s manufacturing sector stagnating and European industrial output showing little sign of recovery, the demand outlook remains subdued. For the Canadian Dollar, this dynamic is particularly damaging. As a net exporter of crude, weaker oil revenues tend to dampen Canada’s trade balance and GDP growth prospects, amplifying downside risks for the CAD.

Commerzbank analysts noted that “a sustainable appreciation of the Canadian Dollar is still some time away,” citing trade frictions with Washington and an uneven domestic economic recovery. With the Canadian economy showing tepid momentum and inflation hovering near target, the Bank of Canada is likely to remain cautious, reducing the policy divergence buffer that could otherwise support the Loonie.

From a technical standpoint, USD/CAD continues to exhibit a bullish pattern, forming higher highs and higher lows on the daily chart—a structure consistent with trend continuation. The pair has broken above a short-term bearish corrective trendline and remains supported by the 50-day exponential moving average (EMA50).

Momentum indicators suggest that the pair is regaining upside strength after offloading overbought conditions. The emergence of a bullish crossover on oscillators such as the Relative Strength Index (RSI) reinforces the case for renewed buying interest. A key daily demand zone between 1.3948 and 1.3890, which serves as a potential launchpad for another leg higher.

We are watching 1.4050 as the immediate resistance to beat, followed by 1.4240 as the next target. A sustained break above 1.4050 could confirm renewed bullish momentum, while failure to hold above 1.3948 would risk a pullback toward the 1.3875 stop-loss level.

BUY USDCAD

ENTRY PRICE: 1.4060

STOP LOSS: 1.3875

TAKE PROFIT: 1.4240

The euro extended its downtrend against the U.S. dollar for the fourth consecutive session on Monday, slipping to 1.1515 at the time of writing — just above fresh multi-month lows near the 1.1500 level. Despite data showing that Eurozone manufacturing activity improved marginally in October, the single currency failed to find any meaningful support, as the U.S. dollar remains buoyed by strong demand following the Federal Reserve’s recent policy tone.

The Fed’s Chair, Jerome Powell, struck a notably cautious tone last week, tempering market expectations for additional rate cuts in December. His remarks, emphasizing data dependency and concern about inflation’s “sticky” nature, signaled that the central bank remains reluctant to ease prematurely. That message has strengthened the greenback and weighed heavily on risk sentiment, extending into the start of the new trading week.

In Europe, fresh data from HCOB confirmed that the Eurozone Manufacturing Purchasing Managers’ Index (PMI) improved modestly to 50.0 in October, up from 49.8 in September — its first time reaching the neutral growth threshold in months. The print suggests that the region’s industrial slowdown might be stabilizing, but analysts remain unconvinced that a sustained recovery is underway.

The marginal uptick was largely attributed to easing supply bottlenecks and tentative improvements in demand. However, underlying challenges persist, particularly in Germany and France, where new orders continue to contract amid weak global trade and subdued domestic consumption. The slight rebound was therefore insufficient to shift the broader narrative of stagnation in the Eurozone’s manufacturing sector.

Adding to the cautious tone, Joachim Nagel, President of the Deutsche Bundesbank and member of the European Central Bank’s (ECB) Governing Council, remarked on Monday that recent data remains broadly in line with the ECB’s forecasts. He reaffirmed that “all options remain open” ahead of the next monetary policy meeting — a statement markets interpreted as a sign the ECB is likely to maintain its current stance, leaving rates unchanged while monitoring inflation progress.

Across the Atlantic, the U.S. dollar has remained the primary beneficiary of the Fed’s more hawkish rhetoric. Following Powell’s comments, traders trimmed bets for a December rate cut, leading to a rebound in U.S. Treasury yields and reinforcing the dollar’s position as the top-performing major currency this week.

Attention now turns to upcoming U.S. manufacturing indicators, including the Final S&P Global PMI and the ISM Manufacturing PMI, both due later today. These figures will be critical in shaping market expectations for the Fed’s next moves. Strong readings could reinforce the case for higher-for-longer rates, potentially adding more downside pressure on the euro.

In addition, Fed officials Mary Daly and Lisa Cook are scheduled to speak later in the session, and investors will closely scrutinize their remarks for any shift in tone regarding inflation risks or policy flexibility. A reiteration of the Fed’s data-dependent approach could further cement the dollar’s dominance in the near term.

From a technical perspective, EUR/USD remains deeply entrenched in a bearish trend. The pair continues to trade below the pivot resistance zone between 1.1558 and 1.1535, confirming persistent downside momentum. While the pair has briefly eased from oversold conditions on the relative strength index (RSI), the recovery attempts have been short-lived.

The next significant support lies at 1.1450, which represents a psychological threshold and a potential area for short-term profit-taking. A decisive break below this level could expose the pair to further declines toward 1.1373, extending the downtrend into the early part of November. Conversely, any sustained move above 1.1558 would be needed to signal a potential reversal or at least a period of consolidation.

SELL EURUSD

ENTRY PRICE: 1.15100

STOP LOSS: 1.15800

TAKE PROFIT: 1.1373

The dollar’s fundamental tone stayed firm last week, fueled by Chair Powell’s hawkish push-back at the post-FOMC presser. By refusing to pre-commit to a December cut, he forced the market to pare back easing bets and lifted the USD across the board. A partial thaw in U.S.–China trade tensions removed another layer of USD-negative uncertainty. Even the ongoing government shutdown—and the resulting data blackout—has not deterred investors, with most desks arguing there is still no compelling short thesis in the near term.

On the euro side, EZ Q3 GDP printed a tick above consensus and a chorus of ECB speakers insisted the “economy is in a good place,” yet the cross still couldn’t shake off its lethargy. President Lagarde reiterated that policy is “appropriately restrictive” and that a near-term rate move is “unlikely,” a stance that should put a soft floor under the single currency but offers little upside traction against a resurgent dollar.

This week’s EZ calendar is light: final French and German manufacturing PMIs, German factory orders and EZ retail sales are the headliners. Unless the releases materially beat forecasts, any EUR lift is expected to be modest at best. In the U.S., the shutdown may delay official releases, but private-sector surveys will still steer sentiment. Traders will key on ISM manufacturing and services indexes and the ADP employment report. A soft payroll pulse would revive December cut pricing, while firm data would give the USD another leg higher.

Therefore, the Fed’s reaction function remains data-dependent, with the labour market and inflation trends still calling the shots.

EURUSD remains in a mid-term consolidation range, but the short-term bias tilts lower. Last week’s close near the range bottom highlights dominant selling pressure. Immediate support sits at 1.1510. A decisive break exposes the August low of 1.1391. Resistance lies at 1.1580 and 1.1600. A sustained breach would revive upside momentum.

Momentum gauges show fading bullish impetus, making intraday rebounds prone to reversal. While 1.1510 offers a technically robust floor that could initially limit downside, persistent USD strength may still force a probe lower.

Overall, the pair is short-term bearish, medium-term range-bound. Monitor payroll data and any Powell remarks for shifts in Fed expectations.

Trading Direction: Sell

Entry Price: 1.1570

Target Price: 1.1286

Stop Loss: 1.1677

Valid Until: 18 November, 2025, 23:55:00

Support: 1.1510/1.1461/1.1393

Resistance: 1.1578/1.1637/1.1668

NZDUSD slid sharply last week, driven predominantly by a resurgent U.S. dollar. Chair Powell’s hawkish post-meeting remarks at the October FOMC forced markets to re-price the probability of a December rate cut, propelling the USD higher across the board as Treasury yields jumped. Prior consensus had priced in a third consecutive 25 bp reduction, which was abruptly unwound, weighing on risk assets and commodity prices and dragging the Kiwi lower.

The Chair’s push-back not only reversed NZDUSD’s earlier uptrend but also left a weekly shooting-star candle, flagging downside momentum. Attention now turns to New Zealand’s Q3 labour-market report, the key domestic input for the RBNZ’s 27 November MPS. While the Bank’s inflation-targeting mandate remains paramount, a softening labour market is increasingly guiding its reaction function. The unemployment rate has drifted higher and participation has rolled over, keeping domestic inflationary pressures muted.

Should this week’s release show no sign of a turnaround, priced-in odds for a fourth straight 25 bp cut at the November meeting will harden, and OIS contracts could nudge the terminal cash-rate sub-2%. Conversely, an upside surprise in employment and wage prints would temper easing expectations. The RBNZ’s own projection sees Q3 unemployment at 5.3% and private-sector wages rising 2.1% YoY both consistent with only tepid inflation pressure.

NZDUSD’s inverse correlation with U.S. Treasury yields has tightened markedly: the five-day rolling correlations with 2- and 10-year benchmarks are ‑0.92 and ‑0.93, respectively, implying that any backup in Treasury yields is almost mechanically accompanied by Kiwi weakness. Concurrently, the currency exhibits high beta to both offshore CNH and SGX whole-milk-powder futures, underscoring its sensitivity to global cyclical-risk sentiment.

On the daily chart, NZDUSD printed a key reversal candle after stalling near 0.5800 and subsequently broke the rising-wedge support, technically confirming a bearish shift. Layered supports follow at 0.5683, 0.5678 and 0.5640. Momentum gauges align with the down-move: RSI has sliced below its own uptrend line and is drifting away from the neutral zone, while MACD is curling lower and entrenched in negative territory, flagging building downside pressure.

During the day, any bounce that fades ahead of 0.5755 can be treated as a sell-the-rip opportunity, with stops parked just above the level to guard against a reversal. A daily close back above 0.5755 would nullify the near-term bearish setup and reopen a retest of 0.5800.

Overall, the pair remains skewed lower under the double weight of a hawkish Fed and RBNZ easing bets. Unless this week’s labour data deliver a material upside surprise, Kiwi topside is likely to remain capped and the October low remains in play.

Trading Direction: Sell

Entry Price: 0.5725

Target Price: 0.5835

Stop Loss: 0.5600

Valid Until: 18 November, 2025, 23:55:00

Support: 0.5735/0.5710/0.5682

Resistance: 0.5802/0.5820/0.5845

The ECB announced its monetary-policy decision on Thursday. As widely expected, the Governing Council left the three key policy rates unchanged: the main refinancing operations (MRO) rate at 2.15%, the marginal lending facility (MLF) rate at 2.40% and the deposit facility (DF) rate at 2.00%. The hold was fully priced in, given both the Council's prior guidance and the fact that the euro-area easing cycle started well ahead of the Fed's.

The ECB has been cutting rates since June 2024, with a cumulative total of eight rate cuts. These measures have finally brought the rates to a relatively comfortable neutral level, without any signs of rising price pressures, while the economy has maintained moderate and stable growth. Christine Lagarde, President of the ECB, reiterated at the subsequent press conference that the ECB is currently in a good position. She further emphasized that officials are prepared to ensure inflation stabilizes at the 2% target level over the medium term. Finally, Lagarde noted that some downside risks to growth have eased, but this is not the case for inflation. The ECB's decision had no real impact on the euro. After market participants digested this news, EURUSD continued its downward trend for the week.

The FOMC lowered the federal funds target range by 25 bp to 3.75%–4.00%.

Governor Stephen Miran dissented in favor of 50 bp, while Kansas-City Fed president Jeffrey Schmid preferred no change. The Committee also announced an immediate end to quantitative tightening. The statement itself moved markets little. However, the reaction came only after Chair Jerome Powell's press conference. Powell struck a distinctly hawkish tone, framing the cut as a risk-management move but stressing that a December reduction is "not a given. "On speculative repricing, the DXY spiked and equities closed marginally lower, while the probability of a December cut fell sharply.

Furthermore, Powell also emphasized the challenges posed by the government shutdown to assessing the economic situation, which has led to a lack of official data, particularly employment-related figures. "Perhaps we should be more cautious," Powell noted. "I am not making a commitment here; I am simply saying that there is indeed a possibility that we might say, 'We really can't see the situation clearly right now, so let's slow down.'"

At the moment, the U.S. government shutdown has entered its fourth week. Federal coffers ran dry on 1 Oct and the Senate has yet to coalesce around a continuing-resolution bill. After the Fed's announcement, price action shows markets are pricing in a protracted closure, but overall sentiment remains relatively orderly.

Trade-war headlines again dominated the newswires this week. After a Seoul sidebar between President Trump and President Xi Jinping, the news-flow turned constructive: Washington will roll back its fentanyl-linked tariff to 10%, while Beijing pledged stepped-up U.S. farm purchases, suspended rare-earth export curbs and agreed to launch energy-sector talks.

Separately, the U.S. unveiled an Enhanced Trade Agreement with Tokyo aimed at aligning critical-mineral supply chains and reaffirming prior joint pledges. Following a Tuesday meeting with Prime Minister Takashi Tachibana, President Trump confirmed that the previously threatened 25% levy on Japanese goods will be set at 15%. In return, Japan committed to a $550 bn industrial-investment package and market-opening steps for U.S. rice, autos and defence hardware.

On the daily timeframe, after the MACD on the EURUSD formed a death cross signal, the fast and slow lines fell below the 0-axis. This indicates the market has entered a bearish phase. The Bollinger Bands are opening downward, and the moving averages are diverging downward. The price is fluctuating downward along the EMA12. The RSI reads 37, meaning the market has entered the oversold zone. If the price breaks below 1.16 again, it will most likely drop to the integer level of 1.15 and around 1.139 (near the EMA200).

From the weekly perspective, the Bollinger Band channels are narrowing. The price broke below the Bollinger Middle Band in a large bearish candlestick pattern. After the MACD formed a death cross, the fast and slow lines are pulling back toward the 0-axis but still have a certain distance to cover, indicating the correction is not yet complete. The RSI reads 50, and the highs are gradually lowering, showing the market has entered a wait-and-see sentiment. Once the price fails to hold above the Bollinger Middle Band after a rebound, it will most likely fall to the EMA50 or even near the Bollinger Lower Band.

Therefore, the short-term trading strategy is recommended to focus on selling at highs.

Trading Direction: Sell

Entry Price: 1.1526

Target Price: 1.12

Stop Loss: 1.173

Support: 1.145/1.14/1.12

Resistance: 1.182/1.192/1.2

The strengthening of the Canadian dollar driven by rising oil prices has led to a subdued USDCAD exchange rate. Notably, Canada is the U.S.' largest crude oil export partner. West Texas Intermediate (WTI) crude oil prices have remained around US$61 per barrel. The increase in crude oil prices is attributed to OPEC+ signaling a pause in production hikes. On Sunday, OPEC+ announced that after a slight increase in output next month, plans are set to suspend further production increases into the first quarter of 2026. Last Wednesday, the Bank of Canada reduced its policy interest rate to 2.25%, indicating that the easing cycle may be nearing completion. The central bank announced a 25 basis point reduction in the overnight rate target to 2.25%, with the bank rate set at 2.5% and the deposit rate at 2.20%. In its policy statement, the Bank noted that, given the increasingly transparent impact of U.S. trade actions on economic growth and inflation, the monetary policy report has resumed its forecasts for the global and Canadian economies. Due to the persistent high uncertainty surrounding U.S. trade policies, these projections now face broader risk ranges than before. The Canadian economy is undergoing a structural transition. Long-term damages from trade conflicts have diminished potential output capacity and increased production costs, thereby constraining the monetary policy space to stimulate demand and maintain low inflation. The Bank of Canada emphasized its commitment to ensuring public confidence in price stability during global economic fluctuations. The next scheduled announcement of the overnight rate target is December 10, 2025, with the upcoming monetary policy report due for release on January 28, 2026.

The Federal Reserve has implemented its second rate cut of the year, lowering the target range for the federal funds rate to 3.75%–4.0%. This has diminished market expectations for a December rate cut, providing support to the U.S. dollar. Consequently, the USDCAD currency pair may recover recent losses and continue its upward trajectory for the third consecutive trading session. Federal Reserve Chairman Jerome Powell stated at the post-meeting press conference that a December rate cut remains highly uncertain. Powell also cautioned that policymakers might need to adopt a wait-and-see approach until official economic data is released. According to the FedWatch tool by the Chicago Mercantile Exchange, traders currently estimate a 69% probability of a rate decrease in December, down from 93% a week earlier. However, due to the prolonged government shutdown, traders are likely to remain cautious, potentially heightening fears about the U.S. economy. The government impasse has entered its sixth week, with Congress deadlocked over an appropriations bill backed by Republicans, and no straightforward resolution currently in sight.

In the 1D timeframe, the Bollinger Bands are contracting, indicating narrowing volatility. The short-term EMA12 has stabilized, and the price has regained support above the EMA12 and the middle Bollinger Band, signaling a shift back to bullish momentum. A golden cross in the MACD would further accelerate the upward trend. The RSI stands at 58, reflecting strong bullish sentiment. Resistance levels are near the upper Bollinger Band and previous highs around 1.407 and 1.44. In the 1W timeframe, the Bollinger Bands are expanding upward, with MACD exhibiting sustained bullish momentum. Price action oscillates near the upper Bollinger Band, and following a MACD golden cross, the MACD line and signal line have moved above the zero-axis. The RSI is at 57, with higher lows, indicating improving market confidence in continued upward movement. Therefore, it is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 1.4017

Target Price: 1.44

Stop Loss: 1.38

Support: 1.378, 1.37, 1.357

Resistance: 1.41, 1.42, 1.44