USD/CAD Supported by Oil Risks and Stronger Dollar Sentiment

USD/CAD is closely linked to oil prices, and the current oil outlook slightly supports further gains in the pair. If hopes for a U.S.-Iran agreement continue to grow and Middle East tensions ease, oil prices could fall. This would likely weaken the Canadian dollar and help push USD/CAD higher.

Recent market positioning also supports this view, with traders becoming more bullish on the U.S. dollar and more bearish on the Canadian dollar.

However, if oil rises above $95 because of renewed Middle East tensions or supply concerns, the Canadian dollar could strengthen and put pressure on USD/CAD.

Technically, Price is trading around 1.3830 and immediate resistance is 1.3867. Price is already above the 200 & 50 DMAs. Key support Sits near 1.3770 and 50 DMA area. A sustained break below this zone would weaken the current bullish structure and could signal the beginning of a downtrend.

Overall, the outlook currently favours a stronger USD/CAD, but oil prices and Middle East developments will remain the key drivers to watch.

USD/CAD Daily Chart