What Happened
The USD/CAD pair pushed higher to trade near 1.3760 on Friday, with the Canadian Dollar struggling to find support even as Oil prices — a key driver of Canada’s economy — moved higher. The US Dollar extended its strength following this week’s hotter-than-expected US inflation print, which rattled expectations for near-term Federal Reserve rate cuts and sent Treasury yields climbing.
Key Levels
Support:
- 1.3720 — short-term floor where buyers have previously stepped in
- 1.3680 — stronger structural support from mid-May consolidation
Resistance:
- 1.3760 — current area of price action and immediate ceiling
- 1.3800 — psychological round number and next upside target if bullish momentum continues
Technical Picture
USD/CAD is trading in a short-term uptrend, with price holding above its 20-day moving average. The persistent bid tone suggests momentum remains with the US Dollar. RSI is approaching overbought territory on the short-term charts, which could see a brief pullback before any further advance.
What Traders Are Watching
A clean break and daily close above 1.3760 would open the door toward the 1.3800 psychological level. Conversely, if USD/CAD slips back below 1.3720, it could signal the US Dollar rally is losing steam and prompt a retest of the 1.3680 support zone. Traders will also monitor Oil prices closely — a sharp spike in WTI crude could give the Canadian Dollar a lifeline and pressure the pair lower.
Bias
Bullish on USD/CAD. Sticky US inflation data keeps Federal Reserve rate cut hopes on the backburner, supporting elevated Treasury yields and a stronger US Dollar. Until inflation cools meaningfully, the path of least resistance for USD/CAD remains to the upside.
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