The USD/CAD pair is demonstrating heightened strength, reaching around 1.3635 during the early European session on Tuesday. The unfavorable perspective for the pair persists beneath the 100-day EMA, alongside a bearish RSI momentum. The initial resistance level is set at 1.3760, and the first support level is located at 1.3560. The pair shows slight increases around 1.3635 in the early European trading session on Tuesday. Uncertainty surrounding US-Iran peace negotiations and the closure of the Strait of Hormuz bolster the appeal of a safe-haven currency such as the US Dollar compared to the Canadian Dollar.
The conversation involving US President Donald Trump and his national security team focused on an Iranian peace initiative designed to halt hostilities and enable access to the Strait of Hormuz, while postponing discussions about its nuclear agenda. Despite this, White House press secretary Karoline Leavitt informed reporters that it remains unclear whether Trump will entertain the proposal to end the two-month-long conflict, as his core demands have not shifted.
The upcoming decision on interest rates by the US Federal Reserve scheduled for later on Wednesday is attracting considerable focus. The US central bank is expected to keep interest rates steady within the 3.50%–3.75% target range during its policy meeting in April on Wednesday. In the daily chart, USD/CAD continues to show a negative near-term perspective as the spot stays beneath the 100-day Exponential Moving Average and the 20-day Simple Moving Average of the Bollinger Bands. The pair is trending lower within the bottom part of the Bollinger envelope, with the Relative Strength Index at approximately 36, staying beneath the neutral 50 line, suggesting persistent downward pressure rather than a clear oversold situation.
On the topside, initial resistance is observed at the 100-day EMA around 1.3760, closely followed by the 20-day SMA near 1.3767. In this scenario, a recovery rally is expected to face selling pressure, as the upper Bollinger band is notably elevated around 1.3974, suggesting a more remote limit. On the downside, the lower Bollinger band at approximately 1.3560 presents the next significant support level, and a decisive break below this threshold would lead to a continuation of the current downward trend.