Key Moments
- USD/CAD trades near 1.3653-1.3655 as the US Dollar firms ahead of the FOMC Minutes release.
- Canada’s January Consumer Price Index rose 2.3% YoY, below the 2.4% consensus and prior reading.
- A decisive move away from the 20-day EMA around 1.3654 may set the next directional leg toward 1.3740 or back toward 1.3500.
USD/CAD Supported by Stronger Dollar Ahead of FOMC Minutes
USD/CAD is trading modestly higher near 1.3653 in early European hours on Wednesday, with the pair lifted by a firmer US Dollar ahead of the release of the Federal Open Market Committee (FOMC) Minutes at 19:00 GMT. The move reflects cautious positioning as market participants look for fresh guidance on the Federal Reserve’s policy stance.
The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is up 0.1% and hovering near 97.20 at the time of writing, adding mild support to the pair.
Investors are focused on the FOMC Minutes for further clarity on the central bank’s monetary policy outlook. At its January meeting, the Federal Reserve opted to pause its monetary easing cycle, keeping the federal funds rate unchanged in a target range of 3.50%-3.75%.
Canadian Dollar Reaction to Softer Inflation
The Canadian Dollar is trading broadly steady after underperforming on Tuesday. The currency came under pressure following the latest Consumer Price Index (CPI) report for January, which indicated that inflationary pressures moderated slightly.
Headline CPI in Canada slowed to 2.3% year-on-year, compared with expectations for an unchanged reading of 2.4%. The previous figure also stood at 2.4%, according to the data.
USD/CAD Technical Overview
At press time, USD/CAD is quoted around 1.3655, trading almost exactly at the 20-day Exponential Moving Average (EMA) located at 1.3654. The EMA has leveled off after an earlier downward move, signaling a loss of downside momentum and positioning this area as an important short-term reference point.
The 14-day Relative Strength Index (RSI) stands at 48, indicating neutral conditions and supporting the view that the pair is in a consolidation phase.
Traders are watching for a daily close that clearly departs from the 20-day EMA to help define the next trend leg. A sustained break and hold above this average would be seen as constructive and could enable an advance toward the identified supply zone near 1.3740. If buyers manage to push and maintain prices above 1.3740, the move could extend toward the 1.3800 round figure.
On the downside, the 1.3500 psychological level is expected to act as an important support area if selling pressure resumes.
(The technical analysis of this story was written with the help of an AI tool.)
Key Canadian Inflation Metrics
| Indicator | Period | Actual | Consensus | Previous | Release Time | Frequency | Source |
|---|---|---|---|---|---|---|---|
| Consumer Price Index (YoY) | January | 2.3% | 2.4% | 2.4% | Tue Feb 17, 2026 13:30 | Monthly | Statistics Canada |
About the Canadian CPI Indicator
The Consumer Price Index (CPI), published monthly by Statistics Canada, measures price changes faced by Canadian consumers by tracking the cost of a fixed basket of goods and services. The year-on-year reading compares the reference month’s prices with those from the same month a year earlier. In general, a higher CPI reading is viewed as supportive for the Canadian Dollar, while a lower reading is typically regarded as negative for the currency.
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