USD/CAD continues to command attention this week as fundamental and technical forces align in favor of further U.S. dollar strength. After the Bank of Canada’s 25bp rate cut on October 29th and dovish forward guidance, the Canadian dollar remains under pressure amid a deteriorating domestic growth outlook and persistent disinflation. In contrast, the U.S. economy remains resilient, with service-sector data and labor indicators suggesting sustained momentum. The resulting policy divergence between a data-dependent, higher-for-longer Federal Reserve and an easing-tilted Bank of Canada reinforces a bullish bias for USD/CAD into the week’s key data events. Technically, the pair has confirmed a decisive breakout above 1.4000, a level that previously capped upside attempts for nearly seven months. With the breakout now holding and momentum-supported dips attracting buyers, the path of least resistance remains to the upside. As we move toward the U.S. and Canadian employment reports on Friday, market positioning and yield spreads continue to favor a buy-the-dip approach, targeting renewed highs toward 1.4180 and 1.4210. USDCAD Trade Setup: Pair / Asset Bias & Entries Stop / Invalidation Targets Why A+ (fundamentals, technicals, sentiment/positioning) Near-term catalysts (UK time) USD/CAD 1.4104 LONG on pullbacks to 1.4060 – 1.4080; add through 1.4120/30 Below 1.3990 (failed breakout back inside 1.40) 1.4180 / 1.4210 (channel top); stretch 1.4250 Fundamentals: BoC cut 25 bp on Oct 29 and remains in easing mode; US data resilient; CAD still sensitive to slower domestic growth. Technicals: Clean breakout to 7-month highs; holding above 1.40/1.4079 pivot. Sentiment: Momentum funds leaning long into jobs; stops likely clustered under 1.4000 round figure. Fri 07 Nov: Canada jobs & unemployment 13:30 (with US NFP at 12:30). Oil/TSX beta headlines intra-day. Chart by TradingView – USDCAD Trade Setup – 6th Nov Conclusion Overall, the USD/CAD setup stands out as an A+ high-conviction trade, with alignment across fundamentals, technicals, and sentiment. The macro backdrop, anchored by diverging central bank trajectories, provides a strong foundation for continued U.S. dollar strength, while the recent technical breakout offers a clear roadmap for trade execution. Unless Canada’s upcoming labor data delivers an unexpected upside shock, dips toward the 1.4060 – 1.4080 zone are likely to attract renewed buying interest. For traders seeking clarity and conviction, USD/CAD remains one of the cleanest expressions of North American policy divergence and macro momentum in play this week and going into next week. This analysis is for informational purposes only and does not constitute investment advice. Trading involves risk; manage exposure accordingly. For similar FX Trade Setups please visit our FX Trade Ideas page. Please visit our Disclaimer page. Disclaimer Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. TerraBullMarkets.com does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets or any financial instrument involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TerraBullMarkets.com nor any of its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page. TerraBullMarkets.com and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. TerraBullMarkets.com and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted. The author and TerraBullMarkets.com are not registered investment advisors and nothing in this article is intended to be investment advice. TerraBullMarkets...
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