CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Create Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Create Account
✖

USD/CAD Rally Eyes August High as RSI Pushes into Overbought Zone

Article By: ,  Strategist
October 15, 2024 5:25 PM

US Dollar Forecast: USD/CAD

USD/CAD climbs to a fresh monthly high (1.3839) as Canada’s Consumer Price Index (CPI) narrows for the fourth consecutive month, with the recent advance in the exchange rate pushing the Relative Strength Index (RSI) into overbought territory.

USD/CAD Rally Eyes August High as RSI Pushes into Overbought Zone

USD/CAD stages a ten-day rally as Canada’s CPI slips to 1.6% in September from 2.0% per annum the month prior, and evidence of slowing inflation may push the Bank of Canada (BoC) to further unwind its restrictive policy as ‘excess supply in the economy continues to put downward pressure on inflation.’

Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here

 

In turn, USD/CAD may continue to appreciate ahead of Bank of Canada (BoC) meeting on October 23 as ‘Governing Council members agreed they would like to see the economy grow at a rate above potential output to begin taking up the slack in the economy so that inflation does not fall too much and instead settles close to the 2% target.’

With that said, USD/CAD may further retrace the decline from the August high (1.3947) as it extends the bullish price series from last week, but the RSI may show the bullish momentum abating if it struggles to hold above 70.

USD/CAD Price Chart – Daily

 

Chart Prepared by David Song, Strategist; USD/CAD Price on TradingView

  • USD/CAD marks the longest advance since January 2016 after failing to clear the March low (1.3420) during the previous month, and the move above 70 in the Relative Strength Index (RSI) is likely to be accompanied by a further advance in the exchange rate like the price action from earlier this year.
  • Need a break/close above the 1.3810 (161.8% Fibonacci extension) to 1.3850 (50% Fibonacci extension) region to open up 1.3900 (50% Fibonacci extension), with the next area of interest coming in around the August high (1.3947).
  • However, lack of momentum to break/close above the 1.3810 (161.8% Fibonacci extension) to 1.3850 (50% Fibonacci extension) region may pull the RSI back from overbought territory, with a move below 1.3700 (38.2% Fibonacci extension) bringing 1.3630 (38.2% Fibonacci retracement) on the radar.

Additional Market Outlooks

British Pound Forecast: GBP/USD Susceptible to Test of September Low

EUR/USD Outlook Hinges on ECB Interest Rate Decision

Gold Price Forecast: Bullion Breaks Out of Bull Flag Formation

Australian Dollar Forecast: AUD/USD Bearish Price Series Persists

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

© FOREX.COM 2025