The sharp drop in oil prices, coupled with a stronger safe-haven dollar, led to a rebound in the USD/CAD exchange rate after a sharp decline.
2026-04-10 15:18:11
The US dollar rebounded against the Canadian dollar (USD/CAD) during Friday's Asian trading session, rising to around 1.3820 and ending a four-day losing streak. This rebound was mainly driven by both falling oil prices and a stabilizing US dollar.
From a fundamental perspective, the Canadian dollar, as a typical commodity currency, is highly correlated with crude oil prices. Recently, international oil prices have fluctuated significantly. Following the short-term ceasefire agreement between the US and Iran, market concerns about supply disruptions have eased, leading to a noticeable decline in oil prices. WTI crude oil has fallen by more than 11.5% this week , putting direct pressure on the Canadian dollar and giving USD/CAD upward momentum.
However, significant uncertainties remain in the Middle East. Israel continues its military operations against targets in Lebanon and has made it clear that it will not cease its attacks on related armed groups. Meanwhile, the shipping issues in the Strait of Hormuz have not been fully resolved, posing a potential threat to global energy supplies. The market estimates that the Strait of Hormuz handles approximately 20% of global seaborne crude oil transport , and its shipping conditions directly impact oil price trends. Therefore, despite a short-term decline in oil prices, a rebound risk remains in the medium to long term.
Furthermore, market research indicates that the US has confirmed it will push for negotiations between Israel and Lebanon in Washington next week. This news has eased market tensions to some extent, but overall uncertainty remains high as the conflict continues.
On the macro level, the market is focused on the upcoming release of the US March CPI data. Inflation is expected to rebound due to fluctuations in energy prices, which could influence the Federal Reserve's policy path. Previously released meeting minutes indicated that the Fed is currently taking a wait-and-see approach, while acknowledging that the inflation risks from energy prices are balancing. This means that policy direction still depends on subsequent data performance.
From a technical perspective, the daily chart shows that USD/CAD has stabilized and rebounded after a continuous pullback, finding support at a key support level. The 1.3700 level forms a significant support, where the price found buying support and rebounded, signaling a short-term bottom. If the exchange rate can hold above 1.3850, it may further test 1.3900 or even higher; conversely, if it falls below 1.3700 again, the downward trend may continue. In terms of momentum indicators, the RSI has rebounded from its lows, and the MACD bearish momentum has weakened, indicating that downward pressure has eased somewhat.
On the 4-hour chart, USD/CAD is exhibiting a consolidation and correction pattern. After breaking through the short-term downtrend line, the price entered a rebound channel, and short-term moving averages have begun to turn upwards. The RSI has risen to around 50, indicating a near balance between bullish and bearish forces; the MACD is gradually approaching the zero line, suggesting improved short-term momentum. A break above the 1.3850 resistance level could further strengthen the rebound; however, if it encounters resistance and falls back, it may continue to trade within a range.
Editor's Summary : The current USD/CAD exchange rate is primarily driven by both oil prices and the US dollar. A sharp drop in oil prices has weakened support for the Canadian dollar, while safe-haven demand and inflation expectations are supporting the US dollar. In the short term, the exchange rate has shown signs of a technical rebound, but its sustainability depends on oil price movements and US CPI data. If oil prices rebound further or inflation falls short of expectations, USD/CAD may come under renewed pressure; conversely, it is expected to continue its upward trend.
From a fundamental perspective, the Canadian dollar, as a typical commodity currency, is highly correlated with crude oil prices. Recently, international oil prices have fluctuated significantly. Following the short-term ceasefire agreement between the US and Iran, market concerns about supply disruptions have eased, leading to a noticeable decline in oil prices. WTI crude oil has fallen by more than 11.5% this week , putting direct pressure on the Canadian dollar and giving USD/CAD upward momentum.
However, significant uncertainties remain in the Middle East. Israel continues its military operations against targets in Lebanon and has made it clear that it will not cease its attacks on related armed groups. Meanwhile, the shipping issues in the Strait of Hormuz have not been fully resolved, posing a potential threat to global energy supplies. The market estimates that the Strait of Hormuz handles approximately 20% of global seaborne crude oil transport , and its shipping conditions directly impact oil price trends. Therefore, despite a short-term decline in oil prices, a rebound risk remains in the medium to long term.
Furthermore, market research indicates that the US has confirmed it will push for negotiations between Israel and Lebanon in Washington next week. This news has eased market tensions to some extent, but overall uncertainty remains high as the conflict continues.
On the macro level, the market is focused on the upcoming release of the US March CPI data. Inflation is expected to rebound due to fluctuations in energy prices, which could influence the Federal Reserve's policy path. Previously released meeting minutes indicated that the Fed is currently taking a wait-and-see approach, while acknowledging that the inflation risks from energy prices are balancing. This means that policy direction still depends on subsequent data performance.
From a technical perspective, the daily chart shows that USD/CAD has stabilized and rebounded after a continuous pullback, finding support at a key support level. The 1.3700 level forms a significant support, where the price found buying support and rebounded, signaling a short-term bottom. If the exchange rate can hold above 1.3850, it may further test 1.3900 or even higher; conversely, if it falls below 1.3700 again, the downward trend may continue. In terms of momentum indicators, the RSI has rebounded from its lows, and the MACD bearish momentum has weakened, indicating that downward pressure has eased somewhat.
On the 4-hour chart, USD/CAD is exhibiting a consolidation and correction pattern. After breaking through the short-term downtrend line, the price entered a rebound channel, and short-term moving averages have begun to turn upwards. The RSI has risen to around 50, indicating a near balance between bullish and bearish forces; the MACD is gradually approaching the zero line, suggesting improved short-term momentum. A break above the 1.3850 resistance level could further strengthen the rebound; however, if it encounters resistance and falls back, it may continue to trade within a range.
Editor's Summary : The current USD/CAD exchange rate is primarily driven by both oil prices and the US dollar. A sharp drop in oil prices has weakened support for the Canadian dollar, while safe-haven demand and inflation expectations are supporting the US dollar. In the short term, the exchange rate has shown signs of a technical rebound, but its sustainability depends on oil price movements and US CPI data. If oil prices rebound further or inflation falls short of expectations, USD/CAD may come under renewed pressure; conversely, it is expected to continue its upward trend.
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