The USD/CAD pair is experiencing modest gains, hovering around 1.3635 in the early hours of European trading on Thursday. Expectations surrounding a potential US-Iran peace agreement aimed at resolving the conflict are exerting downward pressure on crude oil prices, consequently impacting the commodity-sensitive Canadian Dollar in relation to the US Dollar.
US President Donald Trump stated on Wednesday that he had “very good talks” with Iran, adding that “it’s very possible we’ll make a deal.” In the interim, Esmaeil Baghaei, the spokesman for Iran’s Foreign Ministry, indicated that a proposal from the United States aimed at concluding the conflict remains “under review,” with Tehran set to communicate its response to the mediator, Pakistan, following the completion of its deliberations.
In the daily chart, USD/CAD maintains a bearish near-term outlook as the spot remains below the 20-period simple moving average and the 100-period exponential moving average around 1.3740. The price is currently consolidating within the lower half of the recent Bollinger envelope. Meanwhile, the Relative Strength Index (14), hovering around 42, indicates a reduction in downside momentum, although it has not yet reached an oversold condition.
On the topside, initial resistance is positioned at the Bollinger midline at 1.3678, succeeded by the 100-period EMA at 1.3740, with a more substantial barrier forming near the upper Bollinger band around 1.3808. On the downside, the next notable support is positioned at the lower Bollinger band around 1.3548. A clear break below this level would pave the way for deeper losses, whereas maintaining a position above this threshold would confine the pair within a corrective range beneath the specified moving averages.