USD/CAD price rebounds to 1.4355 as dollar strengthens
USD/CAD rebounds to 1.4355; oil prices cap gains
The USD/CAD pair clawed back to 1.4355 in early European trading on Thursday, ending a three-day losing streak. Renewed demand for the US dollar (USD) provided a cushion for the pair, although higher crude oil prices strengthened the Canadian dollar (CAD), limiting USD/CAD's recovery potential.
Traders are closely watching technical levels as the pair navigates a volatile market environment. Upcoming US economic data, particularly housing and industrial production figures, could further shape the pair's short-term trajectory.
USD/CAD price analysis (Nov 2024 - Jan 2025) Source: TradingView.
Bearish outlook below the 100-period EMA
On the 4-hour chart, USD/CAD remains in bearish territory, trading below the critical 100-period Exponential Moving Average (EMA). The Relative Strength Index (RSI) hovers below the midpoint at 45.80, indicating limited upward momentum and suggesting the potential for further downside. The initial support level is pegged at 1.4322, the low from January 16.
Should the pair breach this, further declines could expose 1.4300, the psychological level and lower Bollinger Band, and potentially 1.4279, the January 6 low.
Upside capped by 1.4400-1.4410 resistance zone
Any sustained upward momentum would require a decisive move above the 100-period EMA, potentially targeting the 1.4400-1.4410 region, which coincides with the high from January 14. Further gains could encounter resistance at 1.4442, near the upper Bollinger Band. Additionally, oil price dynamics and Canada’s upcoming inflation report could add pressure to the USD/CAD pair.
In our previous analysis, we explored how strong Canadian employment data, which reduced the likelihood of Bank of Canada rate cuts, pressured USD/CAD. This context continues to shape the pair's movement, highlighting the influence of domestic and global economic factors on its trajectory.
