Over the past 24 to 48 hours, the USD/CAD pair has maintained a strong rally, fluctuating near the previous day’s closing price of 1.38196 and steadily approaching the 1.3830 level. The ongoing uncertainty surrounding geopolitical conflicts in the Middle East has driven the pair higher during Asian trading sessions, extending its winning streak to four consecutive days.

Recent market news highlights the tense situation in the Middle East and stalled US-Iran diplomatic talks, which have heightened safe-haven demand for the US dollar, thus bolstering the USD/CAD exchange rate. Although oil prices dipped at times, their support for the Canadian dollar was limited, as investors widely bet that US-Iran negotiations will fail to achieve a ceasefire, causing risk sentiment to favor the dollar and explaining the sustained USD strength against the CAD.

For the average investor, this scenario resembles a high-stakes game marked by uncertainty where the US dollar is favored as a safe haven, while the Canadian dollar—despite its close ties to oil prices—fails to gain support here due to oil’s mixed performance. Investors are advised to monitor developments in the Middle East and crude oil markets closely, as these will continue to drive the direction of USD/CAD going forward.

Daily Chart

The daily chart reveals a clear uptrend for USDCAD, with the price steadily breaking above the resistance zone between 1.3700 and 1.3750. The 50-day moving average is trending upwards, and the price remains above the 200-day moving average, indicating strong bullish momentum. The Bollinger Bands are expanding, signaling increased volatility, while the MACD shows a bullish crossover, reinforcing the recent upside momentum. This technical setup supports a continuation of the upward move in the near term, confirming a well-established bullish daily trend.

1H Chart

On the hourly chart over the past five days, USDCAD has demonstrated strong bullish momentum, moving from around 1.3700 to near 1.3830. The price consistently stays above the 20-hour moving average, with Bollinger Bands showing an upward expansion pattern. The MACD histogram continues to widen positively and RSI holds around 60 without indicating overbought conditions, sustaining a strong short-term technical outlook. The formation of a bullish flag pattern suggests potential for further breakout continuation in the coming sessions.

Technical Trend:  Cautiously Bullish

Technically, the daily chart breakout above the resistance zone combined with a MACD bullish crossover signifies strong upward momentum for USDCAD. The hourly chart reveals a bullish flag pattern, which typically acts as a continuation pattern for further gains. The pair’s ability to hold above 1.3830 will be pivotal to unlock the next price target near 1.3900. Enhanced volume and momentum indicators suggest a high-probability long setup, making pullback entries attractive for traders looking to capitalize on the uptrend.

The economic calendar for today (GMT+1) shows no major events directly impacting the Canadian dollar or the US dollar. Key releases include the US Weekly Jobless Claims at 13:30 GMT+1 (20:30 HKT) and the EIA Natural Gas Storage report at 15:30 GMT+1. These could impact USDCAD’s short-term price action. A better-than-expected jobless claims number would likely strengthen the US dollar and support a further advance in USDCAD, while a weaker print could introduce some downside pressure. Traders should watch the US data closely for cues.

Resistance & Support

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