USD/CAD Price Analysis: US Dollar Rebounds as IEA Oil release weighs on CAD

USD/CAD climbs above 1.3600 momentarily as the pair recovered early in the American session.
WTI crude trades around $87, stabilizing after falling from a three-year high, which pressures the oil-sensitive Canadian Dollar (CAD).
US CPI rose 0.3% MoM in February (2.4% YoY), reinforcing expectations that the Federal Reserve will maintain a cautious stance.

Agustin Wazne FXStreet

The USD/CAD pair is trading near the 1.3580 level, regaining its footing in Wednesday's American session after the International Energy Agency (IEA) agreed to release 400 million barrels of oil to address the supply disruption from the Iran war.

West Texas Intermediate (WTI) Oil is trading near $87 per barrel in a tight-bound range after reaching a three-year high of above $119 on Monday. This affected the Canadian Dollar (CAD) as it's being held back by the IEA news. The heavily commodity-linked currency has a symbiotic relationship with Oil.

In the United States, the Consumer Price Index (CPI) increased by 0.3% MoM in February, matching market expectations and accelerating from a 0.2% rise in January. On an annual basis, the headline CPI remained steady at 2.4% YoY, consistent with forecasts. This data supports the view that the Federal Reserve (Fed) will continue to adopt a cautious policy stance as inflation persists above the Fed’s 2% target.

Statistics Canada will release its monthly employment report for February on Friday, while the CPI for the same month will be released next Monday. This could reshape the next Bank of Canada (BoC) monetary policy decision scheduled for next Wednesday.

Short-term technical analysis

In the 4-hour chart, USD/CAD is mildly bearish as the pair holds around the 20-period Simple Moving Average (SMA) while below the 100- period SMA, which capped recovery attempts around 1.3600. The 20-period SMA is rolling over below the 100-period one, reinforcing a soft downside tone, while price action remains confined under both. The Relative Strength Index (RSI) has recovered from oversold territory but turned lower below its 50 line, indicating subdued bullish momentum and leaving sellers with a slight advantage on rebounds.

Immediate resistance is located at 1.3630, where horizontal supply converges with the nearby moving averages, and a sustained break above this area would be needed to ease downside pressure and open 1.3680 next. On the downside, initial support aligns at 1.3542, with a break lower exposing the next bearish target at 1.3525. As long as the pair trades below 1.3630, rallies are vulnerable to renewed selling into the moving average zone, keeping the short-term risk skewed to the downside.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD trims losses, back above 1.1500

EUR/USD picks up some pace and bouces off earlier lows, reclaiming the 1.1500 threshold and beyond at the end of the week. The pair’s modest pullback follows a persistent risk-averse market mood and renewed buying interest for the US Dollar.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Bitcoin eyes 50-day EMA breakout, Ethereum consolidates, XRP steadies

Bitcoin, Ethereum, and Ripple trade near key technical levels on Friday as the broader cryptocurrency market pauses following last week's recovery. BTC is approaching the 50-day Exponential Moving Average while ETH continues to consolidate between two major EMAs.

Warsh needs to restore his reputation

We were glad to see our deeply negative reaction to the Warsh press conference was not some personal peculiarity. Just about everybody in the financial press felt the same way. The consensus is building it’s not the Fed in the dog-house but only Warsh. Today the WSJ changed it tune and blasted Warsh—"the honeymoon is already over..”

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.