USD/CAD climbs further beyond 1.3700 amid bearish Oil prices, modest USD strength

USD/CAD gains traction for the second successive day and is supported by a combination of factors.
Bearish Crude Oil prices undermine the Loonie and act as a tailwind amid the ongoing USD recovery.
Bets that the Fed is done raising rates might keep a lid on any further gains for the USD and the pair.

Haresh Menghani FXStreet

The USD/CAD pair attracts some buying for the second straight day on Tuesday and builds on the overnight goodish rebound from the 1.3630-1.3625 region, or a near three-week low. The momentum lifts spot prices back above the 1.3700 mark during the Asian session and is sponsored by a combination of factors.

Crude Oil prices languish near a two-month low touched last Friday in the wake of the uncertain economic outlook, which could dent fuel demand. This is seen undermining the commodity-linked Loonie, which, along with a further US Dollar (USD) recovery from its lowest level since September 20 set the previous day, turn out to be key factors acting as a tailwind for the USD/CAD pair.

The softer US jobs report released on Friday reaffirmed the view that the Federal Reserve (Fed) will maintain the status quo for the third straight meeting in December. That said, the overnight comments by Fed officials raise uncertainty over the US central bank's next policy move and prompt some follow-through USD short covering. Apart from this, a softer risk tone benefits the safe-haven buck.

Investors, however, seem convinced that the Fed is done raising rates. This is reinforced by a fresh leg down in the US Treasury bond yields, which might keep a lid on any further gains for the USD bulls and the USD/CAD pair. Traders might also prefer to wait for speeches by other influential FOMC members, including Fed Chair Jerome Powell, which could provide cues about the future rate-hike path.

Hence, it will be prudent to wait for strong follow-through buying before confirming that the USD/CAD pair's recent corrective decline from the vicinity of the 1.3900 mark, or its highest level since October 2022, has run its course. Traders now look to the release of Trade Balance data from the US and Canada. This, along with the USD and Oil price dynamics, should provide some impetus to the pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3714
Today Daily Change	0.0017
Today Daily Change %	0.12
Today daily open	1.3697

Trends
Daily SMA20	1.3726
Daily SMA50	1.3632
Daily SMA100	1.3474
Daily SMA200	1.3492

Levels
Previous Daily High	1.3698
Previous Daily Low	1.3629
Previous Weekly High	1.3899
Previous Weekly Low	1.3654
Previous Monthly High	1.3892
Previous Monthly Low	1.3562
Daily Fibonacci 38.2%	1.3672
Daily Fibonacci 61.8%	1.3656
Daily Pivot Point S1	1.3651
Daily Pivot Point S2	1.3606
Daily Pivot Point S3	1.3582
Daily Pivot Point R1	1.372
Daily Pivot Point R2	1.3744
Daily Pivot Point R3	1.379

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD rises to near 1.1650 amid dovish Fed expectations

EUR/USD edges higher after registering gains in the previous six successive sessions, trading around 1.1650 during the Asian hours on Monday. The pair appreciates as the US Dollar struggles amid dovish Federal Reserve expectations. Friday’s slower-than-expected US jobs growth suggests the US central bank could hold interest rates steady later this month.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold hits a fresh record high as rising geopolitical risks boost safe-haven demand

Gold scales higher for the third straight day and climbs to a fresh all-time peak, beyond the $4,550 level, during the Asian session on Monday. Reports that US President Donald Trump is weighing a series of potential military options in Iran following deadly protests in the country fuel the risk of a further escalation of geopolitical tensions amid the protracted Russia-Ukraine war. This, along with rising bets for more rate cuts by the Fed, offsets the recent US Dollar rally and is seen benefiting the safe-haven bullion.

Week ahead: US CPI might challenge the geopolitics-boosted Dollar

Geopolitics may try to steal the limelight from US data. A possible US Supreme Court ruling on tariffs could dictate market movements. Dollar strength might be tested if investors refocus on Fed expectations. A crammed data calendar next week, US CPI comes on Tuesday; Fedspeak to intensify. Euro weakness persists, lingering risk of deterioration in US-EU relations.

The weekender: The market that refused to blink and dispersion is the signal

Last week was supposed to be a week of verdicts. Jobs. Tariffs. Rates. Instead, markets got ambiguity and treated it like oxygen. December payrolls undershot expectations but remained well within the market-perceived bullish-for-equities tolerance. 50,000 jobs added and unemployment down to 4.4% kept the data squarely in the Fed no-action zone.

XRP trades under pressure amid weak retail demand

XRP presses down on the 50-day EMA support as risk-averse sentiment spreads despite a positive start to 2026. XRP faces declining retail demand, as reflected in futures Open Interest, which has fallen to $4.15 billion.