The USD/CAD currency pair continues to trade within a defined range, with the exchange rate holding near 1.3700 as traders anticipate pivotal monetary policy decisions from the Bank of Canada (BoC) and the Federal Reserve (Fed). This period of consolidation in the forex market has brought renewed focus on Bitcoin demand in Canada, as improving liquidity conditions support institutional accumulation through regulated investment vehicles.
USD/CAD traded near 1.3574 on Thursday before climbing back toward the 1.3700 level. The pair remains confined between the 1.35 support area and the 1.3750 resistance zone. Falling U.S. 10-year yields have pressured the dollar broadly, keeping the pair rangebound. Analysts highlight that a break above 1.3750 could open the door to 1.3800, while a move below 1.3650 would weaken the current bullish case.
Bitcoin Demand in Focus as Liquidity Improves
The currency pair’s consolidation has shifted trader attention to Bitcoin demand in Canada. As liquidity conditions improve, market participants are watching whether regulated access to Bitcoin through products such as Purpose Investments’ spot Bitcoin ETFs can support quieter institutional accumulation. The Canadian dollar’s relative stability against the greenback has created an environment where Canadian investors may increasingly seek alternative assets like Bitcoin to hedge against potential currency weakness or central bank policy shifts.
Central Bank Decisions Loom Large
The BoC is expected to hold its key interest rate steady at 4.50%, though some analysts see a chance for a surprise cut as Canada’s inflation rate has cooled faster than expected to 3.8%. The Fed is likely to keep rates unchanged at 5.25% to 5.50%. This 75-basis-point rate differential favors the U.S. dollar and supports the current USD/CAD level. The BoC decision is scheduled for Wednesday, while the Fed decision follows next week.
Technical and Fundamental Factors
From a technical perspective, USD/CAD remains bullish above the 1.3650 support level, trading above both its 50-day and 200-day moving averages—a 'golden cross' pattern. The Relative Strength Index (RSI) near 60 indicates room for further gains. Oil prices, which directly affect the Canadian dollar as a major oil exporter, have pulled back from $90 per barrel to around $85, removing a key support for the loonie. This decline reinforces the USD/CAD upward trend and may further stimulate Bitcoin demand among Canadian investors seeking non-commodity-correlated exposure.
