Canadian Prime Minister Mark Carney recently met with U.S. President Donald Trump to discuss countermeasures against U.S. tariffs on goods such as steel and automobiles. During the meeting, Carney raised the possibility of reviving the Keystone XL oil pipeline project. This approximately 1,900-kilometer pipeline is designed to transport 830,000 barrels of crude oil daily from Alberta’s oil sands region in Canada to the Cushing storage hub in Oklahoma, and then on to refineries along the Gulf Coast. Since its proposal in 2008, the project has faced numerous setbacks: it was rejected during the Obama administration due to strong opposition from environmental groups and Indigenous communities, was revived under Trump, but was halted again in 2021 when the Biden administration revoked key permits. Although Trump expressed support for restarting the project in February this year and promised swift approval, the project operator, TC Energy, had already spun off its pipeline business into a separate entity, South Bow, last October after suffering significant losses. South Bow has since explicitly stated that it has abandoned the Keystone XL project. Currently, Canada has not confirmed whether any companies are willing to take over the construction, and negotiations remain in the early stages, with further discussions to evaluate the proposal. On Thursday, the Canadian dollar, which is tied to commodities, faced challenges due to falling crude oil prices, with the currency pair rising by about 0.5%. As the largest oil exporter to the U.S., Canada is seeing downward pressure on the Canadian dollar amid falling oil prices. Additionally, the recent agreement between Israel and Hamas on the first phase of a ceasefire plan has reduced geopolitical risk premiums, further weighing on oil prices.

The outlook for Federal Reserve policy is broadly shrouded in dovish sentiment, which could pose challenges for the U.S. dollar. On Friday, San Francisco Federal Reserve President Mary Daly said that inflation levels are far below her previous concerns, and the Fed is expected to further reduce risk management measures. New York Federal Reserve President John Williams stated that, given the risks of a slowdown in the labor market, he supports another rate cut by the Fed this year. He expects that if inflation edges back up to around 3% and the unemployment rate rises moderately, the policy rate will adjust along the intended path. Williams emphasized that the Fed needs to strike a balance between curbing inflation and supporting the job market, noting that Trump's trade tariffs have a limited impact on inflation, raising it by only about 0.25 to 0.5 percentage points. Meanwhile, Federal Reserve Governor Michael Barr took a more cautious stance, warning of simultaneous risks of rising inflation and a weakening labor market, and stressing the need to avoid overly rapid rate cuts. He predicted that the core PCE inflation rate could exceed 3% by the end of the year, with overall inflation not returning to the 2% target until the end of 2027.

Based on the 4H chart, the Bollinger Bands and moving averages are diverging upwards. The price has broken above the upper boundary of a symmetrical triangle with a strong bullish candlestick, and the MACD bullish momentum expanded again, indicating a short-term uptrend. The RSI reading of 66 suggests strong bullish sentiment in the market. Meanwhile, the Bollinger Bands are expanding upward in the weekly chart, with moving averages poised to form a golden cross. The price is fluctuating near the Bollinger Upper Band. After forming a golden cross, the MACD line and the signal line are expected to return above the zero axis. The RSI reading is 58, with lows gradually rising, suggesting a high likelihood of further upside toward the 1.41–1.44 range. Buying at lows is recommended.

Trading direction: Buy

Entry price: 1.4024

Target price: 1.44

Stop loss: 1.38

Support: 1.378/1.37/1.357

Resistance: 1.4/1.401/1.44