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NEW YORK, January 9, 2026 – The USD/CAD exchange rate stabilized Thursday, continuing its post-Christmas recovery and reaching a one-month high of 1.3887. This rebound reflects a strengthening U.S. dollar and a corresponding pullback from riskier currencies like the Canadian dollar, often referred to as the “loonie.”
USD/CAD Eyes 1.3900 as Traders Weigh Economic Signals
The currency pair is currently navigating a key technical area, with potential for further gains but also risks of a pullback.
- USD/CAD extended its rally after the holidays, regaining roughly half of its November-December losses.
- Traders are closely watching the 1.3890-1.3900 range, where major moving averages are converging.
- While the short-term outlook is positive, momentum indicators suggest potential profit-taking near 1.3900.
The exchange rate’s recent performance is occurring as market attention shifts to upcoming economic data releases from both the United States and Canada. Additionally, traders are anticipating a potential Supreme court ruling regarding former President Trump’s import tariffs, which could influence market sentiment.
Why is USD/CAD moving? The USD/CAD exchange rate has been rising due to a combination of factors: a strengthening U.S.dollar, a weakening Canadian dollar, and anticipation of key economic data releases.Who is affected? This impacts businesses involved in cross-border trade between the U.S. and Canada, as well as investors holding assets in either currency. What is happening? The pair is currently testing a critical resistance zone between 1.3890 and 1.3900. How did it end? As of January 9, 2026, the pair reached 1.3887, and its future direction hinges on upcoming data and the Trump tariff case ruling.
The USD/CAD is currently testing a critical resistance zone between 1.3890 and 1.3900, where the 50-day and 200-day simple moving averages (SMAs) are converging. A decisive break above this level could open the door to further gains, potentially targeting the 61.8% Fibonacci retracement level at 1.3945 and the psychologically important 1.4000 mark. Beyond that, the previously broken support trendline around 1.4040 could become a target.
However, the bullish momentum may be losing steam. the stochastic oscillator is indicating a potential downside trend while in overbought territory, and the price is currently trading near the upper Bollinger band. If USD/CAD fails to surpass the 1.3900 level, it could face support at 1.3815, with a further decline potentially exposing the 20-day SMA at 1.3755. A breach of this level could led bears to target the crucial 2023 support trendline near 1.3680.
Did you know? Fibonacci retracement levels are often used by traders to identify potential support and resistance areas based on mathematical ratios found in nature.
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