FX.co ★ Helsinki | USD/CAD

The US dollar is holding steady against the Canadian dollar, with the pair trading near 1.3705. On the H1 chart, the 200 SMA sits at 1.3655, acting as a support level below the current price. The 50 SMA on the same chart is at 1.3700, sitting right at the current price level and working as a pivot point. On the H4 chart, the 200 SMA is at 1.3740, serving as a resistance ceiling above. The 50 SMA on the H4 chart is at 1.3660, adding another layer of support underneath. The current price of 1.3705 is trading above the H1 200 SMA and the H4 50 SMA, but remains below the H4 200 SMA at 1.3740. The H1 50 SMA at 1.3700 is acting as a key pivot level, with price hovering right around it. This tells us that bulls have some support below but face a solid ceiling just above. On the downside, the key support areas are as follows. First support is at 1.3680 to 1.3700, where the H1 50 SMA and the current price zone create a demand area. Second support is at 1.3655 to 1.3665, where the H1 200 SMA and H4 50 SMA converge to form a strong floor. Third support is at 1.3620 to 1.3630, marking a demand zone from past trading. More support levels include 1.3600 to 1.3610, 1.3570 to 1.3580, and 1.3550 to 1.3560 as deeper cushions. On the upside, the key resistance areas are as follows. First resistance is at 1.3725 to 1.3740, where the H4 200 SMA sits as the first major hurdle. Second resistance is at 1.3760 to 1.3770, a supply zone from recent peaks. Another resistance is at 1.3800, the psychological round number and a strong barrier. More resistance levels include 1.3870 and 1.3900 as higher targets. The pair is currently hovering around the 1.3700 pivot level, with the H1 50 SMA acting as a magnet for price. A break above 1.3740 would open the door to 1.3760 and then 1.3800. A drop below 1.3680 would target 1.3655 and then 1.3620. The next few sessions will likely determine whether bulls or winners gain control.

The USD/CAD pair is being shaped by several key fundamental forces. The Bank of Canada has signaled that it may need to keep interest rates higher for longer due to persistent inflationary pressures, especially from rising energy costs, while the US Federal Reserve is also maintaining a hawkish stance, with markets pricing in a potential rate hike by the end of 2026 following hot CPI data. This policy outlook on both sides of the border remains tight, keeping the pair range-bound. However, Canada is the largest crude oil exporter to the United States, so when oil prices rise, the Canadian dollar typically strengthens because energy exports increase in value. Currently, Middle East tensions and disruptions in the Strait of Hormuz have pushed oil prices higher, which supports the loonie and limits upside for USD/CAD. The US dollar continues to benefit from its safe-haven status amid ongoing geopolitical uncertainty surrounding the US-Iran conflict and fragile ceasefire. Strong US economic data, including the recent hot CPI reading of 3.8 percent, has reinforced expectations that the Federal Reserve may delay rate cuts or hike further, strengthening the greenback. Any progress toward a US-Iran peace deal would lower oil prices and reduce safe-haven demand for the dollar, potentially helping USD/CAD move lower. Moreover, Canadian economic data, including jobs reports and GDP figures, will play a key role, with stronger data supporting the loonie and weaker data hurting it. Risk sentiment also matters, as the Canadian dollar is considered a commodity currency that tends to rise when global markets are optimistic and fall when fear dominates.