USD/CAD Price Forecast: Buyers challenge 100-day SMA after double-bottom formation

Market bias: cautiously bullish USD/CAD, but highly event-dependent.

The article points to a developing technical recovery rather than a confirmed trend reversal. USD/CAD has formed a potential double bottom around 1.3732–1.3759, is holding above the 200-day SMA near 1.3832, and momentum indicators have improved. This suggests that downside pressure is easing and may encourage short-covering or tactical dollar buying. However, the pair remains below the 100-day SMA near 1.3931, making that area the key confirmation point rather than an established breakout.

The macro catalyst is more important than the chart pattern: markets were pricing a high probability of a Federal Reserve rate increase at the September 16, 2026 meeting, while the Bank of Canada was reported to have kept its policy rate at 2.25%. A hawkish Fed outcome, particularly through guidance or projections implying further tightening, could widen the US–Canadian rate differential and support USD/CAD. Conversely, if the hike is fully priced and the Fed signals limited follow-through, the pair could face a “buy the rumor, sell the fact” reversal.

Bullish scenario:

A sustained daily close above the 100-day SMA, followed by clearance of the 50-day SMA near 1.3963, would strengthen the double-bottom interpretation and shift attention toward 1.4000, then the article’s projected resistance zones near 1.4115 and 1.4225. This would likely be reinforced by higher US yields, stronger Fed expectations, or renewed broad-based dollar demand.

Bearish or reversal scenario:

Failure near the 100-day SMA would leave the recovery vulnerable to profit-taking. A break back below the 200-day SMA would weaken the bullish setup, while a move under 1.3759–1.3732 would invalidate the double-bottom structure and revive the broader downtrend. Stronger oil prices remain a counterweight because they can improve Canada’s terms of trade and support the CAD, even though the article notes that this relationship was not providing much support at the time.

The immediate market impact is therefore moderately bullish for USD/CAD but not yet decisive. Traders should monitor the Fed’s rate decision and guidance, US–Canada yield spreads, crude-oil performance, and whether USD/CAD can achieve a confirmed daily break above the 100-day SMA. The pattern is most vulnerable to a dovish Fed surprise, falling US yields, or a renewed oil-led CAD rally.