Over the past 24 to 48 hours, the USD/CAD pair has displayed a clear bearish trend, with prices gradually declining from yesterday’s close of 1.36713 to test lows below 1.3650 this week. Scotiabank’s recent market commentary noted that while the Canadian Dollar has remained relatively steady against the US Dollar, geopolitical tensions—especially the ongoing US-Iran ceasefire talks—have influenced investor sentiment, putting downward pressure on the US Dollar.

Notably, Iran’s announcement to reopen the Strait of Hormuz boosted risk appetite globally, causing oil prices to rebound and enhancing the appeal of the energy-linked Canadian Dollar. This dynamic has accelerated the weakening of the US Dollar, leading to a new three-week low in USD/CAD. Market watchers anticipate that if the pair breaks the key support level at 1.3600, further significant declines could follow.

For the average investor, these exchange rate movements highlight how sensitive currency markets are to geopolitical developments and commodity price shifts. The pause in conflict tensions has temporarily eased safe-haven demand, driving funds back toward the Canadian Dollar. This signals the importance of monitoring international political developments and energy market trends closely to adapt foreign exchange positions wisely and mitigate potential risks in an uncertain environment.

Daily Chart

The daily chart of USDCAD shows a sustained downtrend with the pair trading below both the 50-day and 200-day simple moving averages, signaling medium to long-term bearish pressure. Bollinger Bands are expanding downward, indicating increasing volatility with a downward bias. The MACD histogram remains below zero, reinforcing the bearish momentum. Overall, technicals favor sellers in the medium term.

1H Chart

On the hourly chart, the pair has formed a descending triangle over the past 3-5 days, breaking key intraday support near 1.3670 and testing 1.3650. Short-term moving averages are aligned bearish, and the MACD recently made a bearish crossover, while RSI approaches oversold levels. The pair may continue lower but watch for potential short-term relief rallies on oversold conditions.

Technical Trend:  The prevailing trend is decisively bearish, with strong downside momentum being confirmed by technical indicators.

USDCAD is clearly in a bearish technical setup with momentum indicators pointing to further downside risk. The recent breakdown from the descending triangle pattern enhances the probability of a test of 1.3600 support. Volume has increased on declines, confirming selling interest. Short-term traders should monitor resistance near 1.3670 as a critical level for any rebound attempt. A return above this level with volume could signal a pause or consolidation.

Today’s economic calendar (GMT+1) does not include significant US or Canadian events expected to directly impact USDCAD. Traders will likely remain focused on oil price trends and geopolitical developments as primary drivers for the pair. Limited fundamental catalysts today suggest price movements will be driven more by sentiment than data releases.

Resistance & Support

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