USD/CAD Price Forecast: Bulls gain traction as cheaper Crude hits Loonie
- USD/CAD hits weekly highs at 1.4080 as lower Oil prices offset upbeat Canadian trade data.
- Soft US data and fading Fed tightening hopes are keeping the US Dollar from rallying further.
- US Dollar bulls are likely to be challenged at the top of a triangle pattern, at the 1.4090 area.
The US Dollar (USD) appreciates for the fourth consecutive day against a weaker Canadian Dollar (CAD) on Wednesday, with the USD/CAD pair pushing against weekly highs at 1.4080 at the time of writing. The CAD is struggling as hopes of a negotiated breakthrough in Iran have sent Oil prices tumbling, although soft US data and fading hopes of immediate Federal Reserve (Fed) rate hikes are keeping the USD from appreciating further.
Crude Oil, Canada's main export, accelerated its decline on Tuesday, with the barrel of Brent Oil trading at three-week lows below $80, amid hopes that diplomacy will find its way to resolve the US-Iran conflict. The decline in Oil prices has offset the impact of the bright Canadian Merchandise Trade Surplus, which reached a four-year high in June.
In the US, recent macroeconomic figures have contributed to cool hopes of Fed tightening in the coming months. JOLTS Job Openings showed a larger-than-.expected decline in June, and Factory Orders contracted against expectations. Against this background, expectations of a Fed rate hike in September have dropped to 58%, from 67% on Tuesday, according to data by the CME Group's FedWatch Tool, which is posing a significant weight for US Dollar rallies.
Technical Analysis: Approaching the top of a triangle pattern
USD/CAD trades at 1.4072, with immediate price action showing a constructive stance and momentum indicators turning bullish. The 4-hour Relative Strength Index (RSI) has climbed above 58, and the Moving Average Convergence Divergence (MACD) holds marginally in positive territory with a flat histogram, hinting at a steady but moderate bullish tone rather than an impulsive breakout.
Bull's confidence, however, is likely to be tested at the top of the descending triangle pattern now at the 1.4090 area. A confirmation above here would clear the path towards the July 27 highs, at the 1.4125 area, ahead of the year-to-date (YTD) highs in the area of 1.4250.
On the downside, the triangle bottom, now around 1.4000, is likely to challenge bears. Further down, the 1.3920 area (June 9 low) and the 1.3865 area (May 28 high, June 5 low) emerge as the next bearish targets.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.07% | 0.00% | 0.06% | 0.05% | 0.50% | 0.01% | |
| EUR | 0.04% | -0.03% | 0.05% | 0.10% | 0.07% | 0.51% | 0.05% | |
| GBP | 0.07% | 0.03% | 0.06% | 0.12% | 0.10% | 0.56% | 0.08% | |
| JPY | 0.00% | -0.05% | -0.06% | 0.06% | 0.05% | 0.48% | 0.00% | |
| CAD | -0.06% | -0.10% | -0.12% | -0.06% | -0.02% | 0.45% | -0.04% | |
| AUD | -0.05% | -0.07% | -0.10% | -0.05% | 0.02% | 0.45% | -0.03% | |
| NZD | -0.50% | -0.51% | -0.56% | -0.48% | -0.45% | -0.45% | -0.46% | |
| CHF | -0.01% | -0.05% | -0.08% | -0.01% | 0.04% | 0.03% | 0.46% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
