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USD/CAD could be ready to rebound

USD/CAD may be due for a rebound after reaching oversold conditions, with renewed US-Canada trade tensions adding support for the US dollar.

Michael J Kramer

Founder, Mott Capital Management

24 Aug 2026, 13:30

USD/CAD may be set to rise after reaching oversold conditions, while the US-Canada trade dispute has started to heat up again. The US dollar has weakened against the Canadian dollar since the beginning of July, but with USD/CAD now trading below its lower Bollinger Band and the relative strength index below 30, the pair appears due for a potential rebound.

A rise in USD/CAD would mean the US dollar is gaining strength against the Canadian dollar. The first test for the pair is likely to be the 10-day exponential moving average, which sits around $1.3850. If USD/CAD can break above that resistance level, it may have room to rise further, potentially towards the 20-day simple moving average and the midpoint of the Bollinger Bands around $1.3940.

Another bullish indication for the US dollar is that the relative strength index has moved above the downtrend that began in early July. This could signal that a reversal is underway and that momentum in USD/CAD is shifting from bearish to bullish.

If USD/CAD fails to break out and move above the 10-day exponential moving average, it is likely to find support near the lower Bollinger Band around $1.3750.

USD/CAD price chart

Source: TradingView, 24 August 2026

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