Having started to recover at the very end of December, USDCAD continued to gain at the beginning of 2026 with higher momentum. Likely increasing supply of crude oil, sooner or later, after regime change in Venezuela, and an apparently weaker job market in Canada compared to the USA have been important factors recently. The Bank of Canada’s rate is likely to remain at least a full percent lower than the Fed’s for some months and possibly into late 2026.
Upward momentum increased significantly from 5 January amid a generally high volume of buying, which might suggest further gains. The price is currently overbought based on the slow stochastic, but it seems to have broken through the 200 SMA at least for now. Currently, the 50 SMA from Bands is being tested: if this is successful, the bounce might continue towards the 100 SMA or possibly further ahead, even higher to $1.40.
All of this depends heavily, though, on the results of the job reports on Friday, 9 January. Both the USA and Canada will release their job reports for December at 13.30 GMT then. Expectations for the American NFP seem broadly more positive than for Canada’s report, but given the unpredictability of job data from both countries in recent months, there’s likely to be a strong reaction by USDCAD to the releases.
This article was submitted by Michael Stark, an analyst at Exness.
For the latest analysis, ideas for trading and more, follow Michael on X: @MStarkExness.
The opinions in this article are personal to the writer; they do not represent those of Exness. This is not a recommendation to trade.
