|

USD/CAD Price Forecast: Vulnerable below 200-SMA on H4 as Oil rallies on supply concerns

  • USD/CAD struggles to capitalize on intraday gains amid a combination of negative factors.
  • Rallying Oil prices underpin the Loonie, while stagflation fears prompt some USD selling.
  • The technical setup favors bearish traders and backs the case for a further depreciation.

The USD/CAD pair attracts some sellers following a modest Asian session uptick to the 1.3675 area and currently trades just above a two-week low, touched on Friday.

Crude Oil prices stick to strong intraday gains of over 5% amid concerns about supply disruptions following the US-Israel strikes against Iran and the closure of the Strait of Hormuz – a critical maritime chokepoint. This, in turn, underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair.

Meanwhile, the US Dollar (USD) retreats from its highest level since January 23 as a stronger US Producer Price Index (PPI) for January and slowing economic growth revive stagflation fears. This, in turn, exerts some pressure on the USD/CAD pair, though the global flight to safety could limit losses for the safe-haven buck.

From a technical perspective, the near-term bias is mildly bearish as the USD/CAD pair holds below the gently descending 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, the recent attempts to recover remained capped beneath that reference, validating the near-term negative outlook for the pair.

The Relative Strength Index (RSI) hovers around 40, showing soft downside momentum rather than capitulation. The Moving Average Convergence Divergence (MACD) line remains below its Signal line and under the zero mark, with a modest negative histogram, which reinforces a controlled bearish tone rather than an impulsive selloff.

Immediate resistance emerges at the 1.3690/1.3700 zone, where the 200-period SMA aligns with a recent consolidation ceiling; a 4-hour close above this area would be needed to ease downside pressure and open a move toward 1.3740.

On the downside, initial support is seen near 1.3630, guarding last week’s pullback base, followed by 1.3590 if sellers extend control. As long as price trades beneath the 200-period SMA, rallies are vulnerable to renewed selling into the aforementioned resistance band.

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

USD/CAD 4-hour chart

Chart Analysis USD/CAD

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 British Pound.

USDEURGBPJPYCADAUDNZDCHF
USD0.20%0.20%0.08%0.03%0.07%0.15%-0.09%
EUR-0.20%0.00%-0.11%-0.17%-0.13%-0.05%-0.29%
GBP-0.20%-0.00%-0.13%-0.18%-0.14%-0.06%-0.30%
JPY-0.08%0.11%0.13%-0.04%-0.00%0.08%-0.16%
CAD-0.03%0.17%0.18%0.04%0.04%0.11%-0.12%
AUD-0.07%0.13%0.14%0.00%-0.04%0.08%-0.16%
NZD-0.15%0.05%0.06%-0.08%-0.11%-0.08%-0.24%
CHF0.09%0.29%0.30%0.16%0.12%0.16%0.24%

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

Haresh Menghani

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

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD holds rebound near 0.6900 on US-China trade optimism

AUD/USD holds the rebound near 0.6900 in the Asian session on Monday. Mixed China's inflation data for October fails to provide any inspiration to the Chinese proxy, the Australian Dollar, but China's extension of the suspension of 24% tariffs on US goods and reduced US-Iran tensions help the Aussie pair cling to recovery gains.

USD/JPY retreat in sync with USD, appraches 158.00

USD/JPY is back in the red at the start of the week on Monday, eyeing the broad US Dollar retreat amid easing US-Iran tensions. Traders also resorting to profit-taking following the blockbuster US Nonfarm Payrolls data-led rally. US CPI report is next in focus.

Gold rises amid US-Iran peace deal hopes, softer US Dollar

Gold price recovers some lost ground above $4,020 during the early European trading hours on Monday. The prospects of diplomacy in the US-Iran conflict and weaker US Dollar (USD) boost the precious metal.

Solana: Persistent ETF outflows extend downside risk in SOL

Solana trades below $90 on Monday, ticking higher after over 3% losses below a long-term support trendline the previous day. SOL has been steadily declining over the last five weeks, aligning with five straight weekly outflows from Solana-focused Exchange-Traded Funds totaling over $150 million.

Economics week ahead

This week, attention turns to Tuesday’s CPI report, with no year-over-year readings available because of last October’s shutdown-related data gap. We expect headline and core inflation to clock 0.28% and 0.21% month-over-month, respectively. Softer core inflation would offer some relief after September’s upside surprise but should still leave our call for a December rate hike intact.

US Dollar breaks below 101.50 as Democrats sweep Congress
The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.