USD/CAD Price Forecast: Bulls Target 1.3900 as RSI Rebounds

USD/CAD rebounded from the intraday low of 1.3833 on Wednesday, driven by stubborn U.S. inflation data. The pair jumped to a new weekly high in a short-term pullback, trading up about 0.26% at 1.3873, now at 1.3876, with bulls eyeing the 1.3900 round figure.

**RSI rebound supports short-term bullish bias**

The Relative Strength Index (RSI) has recovered from the previous neutral zone, indicating that buying momentum is regaining the upper hand and providing technical support for further short-term upside. Market data shows the MACD histogram approaching the zero line, reflecting balanced momentum in short-term moving averages, but the RSI rebound signal is more definitive, suggesting the consolidation pattern may tilt toward a bullish direction.

**Inflation data as core driver**

Stubborn U.S. inflation data has reinforced expectations that the Federal Reserve will maintain higher interest rates for longer, providing support for the U.S. dollar. Meanwhile, oil prices fell below $80 per barrel, putting pressure on the Canadian economy, which relies on crude exports—oil accounts for nearly 20% of Canada's trade surplus—thereby weakening the Canadian dollar and further boosting USD/CAD.

**Upside resistance and institutional forecasts**

On the technical front, 1.3900 is a key psychological level in the short term. A decisive break above it could open further upside room for bulls. According to LiteFinance's forecast, the average USD/CAD price in August may hover around 1.3900, with a trading range between 1.3800 and 1.4200. CoinCodex offers a similar projection, expecting an August average of around 1.3900 and a potential rise to 1.4100 by October. However, some analysts note that if the pair fails to break above the higher resistance zone, a consolidation pattern may persist in the near term.