USD/CAD Holds Firm Ahead of Key US Jobs Data

Traders' Opinions

Summary:

USD/CAD climbed back toward multi-month highs as widening Federal Reserve and Bank of Canada policy divergence, weaker oil prices, and persistent geopolitical uncertainty continued to underpin demand for the US Dollar.

BUY USDCAD

EXP

PENDING

1.42250

Entry Price

1.44500

1.41000

1.42148 -0.00004 0.00%

Pips

PENDING

1.41000

Exit Price

1.42250

Entry Price

1.44500

The US Dollar strengthened against the Canadian Dollar on Wednesday, with USD/CAD rebounding toward the 1.4220 area after a brief pullback from its highest level since April 2025. The pair remained firmly supported as traders looked ahead to speeches from Bank of Canada Governor Tiff Macklem and Federal Reserve Chair Kevin Warsh for fresh guidance on the monetary policy outlook.

Markets continue to favor the US Dollar as expectations for further Federal Reserve tightening contrast sharply with the Bank of Canada's more cautious stance. Investors expect the BoC to keep interest rates unchanged through much of 2026 as policymakers prioritize supporting a slowing economy, while the Fed continues to signal that another 25-basis-point rate hike remains possible before year-end.

The Greenback also drew support from lingering geopolitical uncertainty surrounding US-Iran negotiations. While US officials traveled to Qatar for discussions aimed at advancing a peace agreement, Tehran denied that formal meetings with American negotiators had been scheduled, raising doubts about the pace of diplomatic progress. Ongoing disagreements over the future of the Strait of Hormuz continue to keep inflation risks elevated and reinforce expectations that the Fed may need to maintain a restrictive policy stance for longer.

Meanwhile, the Canadian Dollar remained under pressure as crude oil prices extended their decline to fresh lows not seen since the outbreak of the US-Iran conflict earlier this year. Falling oil prices typically weigh on Canada's export-driven economy, reducing support for the commodity-linked currency and further strengthening the bullish case for USD/CAD.

Technical Analysis

USD/CAD remains firmly bullish on the 4-hour chart, with price trading near 1.4215 while continuing to respect a rising trendline that has guided the pair higher since late May. The broader structure remains constructive, with the market printing higher highs and higher lows, confirming that buyers remain in control.

The immediate technical focus is the 1.4250 resistance zone, where recent upside attempts have paused. A clean break above this area would likely confirm renewed bullish momentum and open the way toward 1.4450, which aligns with the projected move on the chart.

On the downside, initial support sits around 1.4180–1.4200, where the rising trendline and recent demand area converge. A sustained break below this zone would weaken the bullish setup and expose 1.4100, followed by 1.4000.

Momentum remains positive, with price consolidating above trendline support rather than rejecting sharply lower. This suggests the current pause is more likely a continuation setup than a reversal.

TRADE RECOMMENDATION

BUY USD/CAD

ENTRY PRICE: 1.4225

STOP LOSS: 1.4100

TAKE PROFIT : 1.4450

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