USD/CAD Price Forecast: Bulls gain traction as cheaper Crude hits Loonie
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.
On Wednesday, the US Dollar (USD) demonstrated strength, gaining against the Canadian Dollar (CAD) for the fourth consecutive day. The USD/CAD pair reached a high of 1.4080, marking weekly highs. The Canadian Dollar (CAD) weakened due to hopes of a breakthrough in the US-Iran conflict, which resulted in a drop in Oil prices. Brent Oil, a significant export for Canada, fell to three-week lows below $80 as diplomacy aimed to resolve the US-Iran conflict.
The decline in Oil prices offset the impact of Canada's strong merchandise trade surplus in June. In the US, recent macroeconomic data contributed to reduced expectations of Federal Reserve (Fed) rate hikes in the near future. The CME Group's FedWatch Tool indicated that the probability of a Fed rate hike in September dropped from 67% to 58%.
As a result, traders are cautious about USD rallies. At the moment, USD/CAD is trading at 1.4072, with bullish momentum indicators and a 4-hour Relative Strength Index (RSI) above 58. However, the confidence of the bulls may be tested at the 1.4090 level, which is the top of a descending triangle pattern. A confirmation above this level could signal a move toward the July 27 highs at 1.4125 and the year-to-date (YTD) highs near 1.4250.
On the downside, the triangle bottom near 1.4000 may pose challenges for bears. Additionally, further down, 1.3920 (June 9 low) and 1.3865 (May 28 high, June 5 low) serve as potential bearish targets.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
