Over the past 24 to 48 hours, the USD/CAD exchange rate showed a slight retreat, closing around 1.40642 yesterday. While rising oil prices typically strengthen the Canadian dollar and limit US dollar gains against CAD, the market maintained a generally bullish tone for the US dollar, preventing a significant drop in USD/CAD.

Recently, the US government announced new tariffs on Canadian goods, alongside escalating tensions in the Middle East that pushed oil prices higher—both key drivers of USD/CAD volatility. The currency moves reflect investors’ complex balancing act between inflation concerns, trade policy shifts, and geopolitical risks impacting risk appetite and safe-haven flows.

For the average investor, the market scenario is akin to buying or selling a car: higher oil prices boost confidence for those holding Canadian dollars (like the car’s value rising), but the new tariffs resemble sudden cost increases for the vehicle, causing the US dollar to regain some strength during this period. In short, the USD-CAD interplay mirrors how international economic policies and risk sentiment remain fluid and influential.

Daily Chart

On the daily chart, USDCAD has maintained a steady uptrend from recent lows. The price repeatedly tests the critical 1.41 resistance but has yet to breach it convincingly. The 200-day moving average sits near 1.38, providing strong support, with the price comfortably above it. Bollinger Bands are widening, indicating increasing volatility. The MACD remains positive with a slight expansion, suggesting sustained bullish momentum in the longer term. Overall, the daily trend favors bulls, pending confirmation of a breakout above the resistance level.

1H Chart

The hourly chart over the last 3-5 days shows USDCAD consolidating between 1.4050 and 1.41. Short-term moving averages such as the 20 and 50 EMA hover close together, signaling a minor bullish bias. A clear flag pattern has formed recently, indicating a potential continuation of the uptrend. MACD is in a bullish crossover above zero, and RSI approaches the 60 mark, reflecting steady upward momentum. The pair is currently testing the 1.4115 resistance area, with an imminent breakout likely to trigger renewed buying interest.

Technical Trend:  The current trend is a steady uptrend (steadily bullish), with the market in a critical consolidation phase awaiting a breakout.

Technically, USDCAD currently consolidates within a short-term bullish flag pattern. A decisive break above 1.4115 would signal the resumption of the upward trend. MACD and RSI indicators support a bullish bias with no significant divergences. The daily chart’s long-term uptrend remains intact, with the 200-day MA acting as key support. Traders should watch oil prices and US-Canada trade developments closely, as these remain major external drivers. A recent bullish engulfing candlestick highlights short-term buying strength, pointing to a higher probability of upward continuation in the next 24 hours.

Regarding today’s economic calendar (GMT+1), the Canadian Retail Sales figures at 14:30 are the most relevant to USDCAD. The market expects a 1% month-over-month increase. A better-than-expected reading would likely strengthen the Canadian dollar, putting downward pressure on USDCAD. The US Weekly Jobless Claims (14:30) and EIA Natural Gas Storage (16:30) provide neutral cues for the USD. Overall, unless retail sales deviate significantly from forecasts, today’s data is unlikely to induce major volatility in USDCAD. No direct impact is expected from other events such as the ECB press conference.

Resistance & Support

Run Live USDCAD Analysis

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