• USD/CAD may test the immediate resistance at the nine-day EMA of 1.4224.
• The 14-day Relative Strength Index at 58.6 shows positive momentum.
• The pair may fall toward the ascending channel bottom around 1.4150.

USD/CAD depreciates after posting modest gains the previous day, trading around 1.4210 during Asian hours on Thursday. The technical analysis of the daily chart indicates that the price is remaining within the ascending channel pattern, suggesting an ongoing bullish bias.

The USD/CAD pair is maintaining a bullish near-term bias as spot holds above the 50-day Exponential Moving Average (EMA). Price is now just under the short-term nine-day EMA, which caps the immediate topside, while the 14-day Relative Strength Index (RSI) at 58.6 stays in positive territory, hinting that dips are more likely to attract buyers than trigger a deeper reversal. The latest reading of the FXS Fed Sentiment Index at 128.17 suggests a subdued but still supportive dollar backdrop, reinforcing the constructive tone.

The USD/CAD pair may rebound and test the immediate resistance at the nine-day EMA of 1.4224, followed by the 18-month high of 1.4299, recorded on October 14. A successful break above this level would support the pair to test the top trendline of the ascending channel around 1.4430, followed by the psychological level of 1.4500.

On the downside, the USD/CAD pair may navigate the region around the bottom trendline of the ascending channel around 1.4150, followed by the 50-day EMA of 1.4073.

Daly leans hawkish but urges patience as markets digest CPI

The FXS Speechtracker score of 6.8/10 marks a modest hawkish tilt relative to the historical average of 6.1/10, underscoring a firmer focus on inflation risks. Daly’s emphasis on gas-driven headline CPI, stubborn core inflation, and the likelihood of more rate hikes, coupled with a preference for deliberate timing over rash action, signals a bias toward further tightening while acknowledging uncertainty over how inflation shocks will evolve. The reassurance that markets have calmed after the initial CPI reaction and the stress on clear, accountable communication suggest the Fed sees markets as aligned with its policy narrative, supporting a steady Dollar backdrop.

The FXS Fed Sentiment Index slipped by 0.84 points to 128.17, indicating a slight pullback in perceived hawkishness. Despite the decline, the index remains well above the neutral 100 mark, confirming that Fed rhetoric stays firmly in hawkish territory even as the immediate tightening impulse moderates, consistent with the nuanced tone captured by the FXS Speechtracker.