The USD/CAD pair remains under significant buying pressure across global markets, supported by elevated US interest rates that continue to favor the US dollar. The USD/CAD pair continues its upward trajectory, driven primarily by the interest rate differential that benefits the greenback. Under current conditions, the pair appears poised to approach the 1.39 level.
The 1.39 level has recently emerged as a key area of focus, suggesting potential resistance. If USD/CAD manages to break above the 1.3933 threshold, the next target could be the 1.40 level. A short-term pullback at this stage would be technically reasonable. However, the broader bias still favors the US dollar over the Canadian dollar, even with rising oil prices. Overall, USD/CAD remains largely influenced by interest rate dynamics.
Any pullback is likely to attract strong interest, particularly near the 200-day EMA. A break below this level could push USD/CAD toward the 1.3750 zone. At present, there is limited interest in shorting USD/CAD, but identifying value during pullbacks could be a prudent approach. While a sustained move above 1.40 seems unlikely in the near term due to slight overextension, a short-term relief rally in the Canadian dollar remains a plausible scenario.