The USD/CAD pair remains strong, and the bullish trend is not yet over; a second acceleration is expected.
2026-07-01 14:05:45
The USD/CAD pair continued its rebound in Asian trading on Wednesday, rising to around 1.4220 and recovering some of the previous day's losses. The current movement is mainly driven by a stronger US dollar and a decline in crude oil prices, putting relative pressure on the Canadian dollar.
From a geopolitical perspective, uncertainty surrounding the Doha negotiations between the US and Iran continues to escalate. Market research indicates that US negotiators have arrived in Qatar to meet with mediators, but Iran has made it clear that it will not meet directly with the US, further clouding the prospects for the peace process. This uncertainty maintains market demand for safe-haven assets and provides temporary support for the US dollar.
In terms of monetary policy, the Federal Reserve maintained interest rates at the 3.50%–3.75% range at its June meeting, while removing the statement indicating a future inclination to cut rates, releasing a hawkish signal. The market currently anticipates a rate hike in September with approximately a 63% probability, which strengthens the attractiveness of the US dollar and becomes a significant supporting factor for the upward movement of USD/CAD.
Meanwhile, the Canadian dollar faced significant pressure, primarily due to weakening crude oil prices. With the resumption of shipping in the Strait of Hormuz and rising market expectations for a potential reconciliation between the US and Iran, the risk premium for crude oil continued to decline. Lower oil prices weakened the support for the commodity currency Canadian dollar, giving USD/CAD further upward momentum.
Overall, the US dollar was supported by both safe-haven demand and interest rate expectations, while the Canadian dollar was dragged down by the pullback in oil prices, pushing the currency pairs back into a rebound structure. In the short term, the market remains in an event-driven phase, with direction depending on macroeconomic data and geopolitical developments.
From a daily chart perspective, USD/CAD has stabilized above 1.42 after a previous pullback, maintaining an overall upward trend. The price is gradually recovering from previous losses, indicating strong buying support. Resistance is located in the 1.4260–1.4300 area; a decisive break above this level would open up further upside potential. Initial support is at 1.4140 ; a break below this level could lead to a return to the current trading range.
From a 4-hour chart perspective, the exchange rate has regained its position above the short-term moving average system, and momentum indicators are showing a moderate upward trend, indicating that the bulls have a slight advantage in the short term. However, overall volatility remains heavily influenced by news, and a clear trend has not yet formed. If the US dollar continues to strengthen supported by data, the exchange rate may further test the 1.43 area; if oil prices rebound, it may limit upside potential and trigger a pullback.
Editor's Summary : The current USD/CAD movement is driven by a combination of a stronger US dollar and weaker oil prices, forming a short-term rebound structure. Geopolitical uncertainty and hawkish expectations from the Federal Reserve are supporting the US dollar, while the decline in oil prices is weakening the Canadian dollar, providing a double boost to the exchange rate. The short-term direction still depends on US employment data and the progress of US-Iran negotiations. If the US dollar continues to dominate and oil prices remain weak, USD/CAD still has room to rise; otherwise, it may enter a high-level consolidation phase.
From a geopolitical perspective, uncertainty surrounding the Doha negotiations between the US and Iran continues to escalate. Market research indicates that US negotiators have arrived in Qatar to meet with mediators, but Iran has made it clear that it will not meet directly with the US, further clouding the prospects for the peace process. This uncertainty maintains market demand for safe-haven assets and provides temporary support for the US dollar.
In terms of monetary policy, the Federal Reserve maintained interest rates at the 3.50%–3.75% range at its June meeting, while removing the statement indicating a future inclination to cut rates, releasing a hawkish signal. The market currently anticipates a rate hike in September with approximately a 63% probability, which strengthens the attractiveness of the US dollar and becomes a significant supporting factor for the upward movement of USD/CAD.
Meanwhile, the Canadian dollar faced significant pressure, primarily due to weakening crude oil prices. With the resumption of shipping in the Strait of Hormuz and rising market expectations for a potential reconciliation between the US and Iran, the risk premium for crude oil continued to decline. Lower oil prices weakened the support for the commodity currency Canadian dollar, giving USD/CAD further upward momentum.
Overall, the US dollar was supported by both safe-haven demand and interest rate expectations, while the Canadian dollar was dragged down by the pullback in oil prices, pushing the currency pairs back into a rebound structure. In the short term, the market remains in an event-driven phase, with direction depending on macroeconomic data and geopolitical developments.
From a daily chart perspective, USD/CAD has stabilized above 1.42 after a previous pullback, maintaining an overall upward trend. The price is gradually recovering from previous losses, indicating strong buying support. Resistance is located in the 1.4260–1.4300 area; a decisive break above this level would open up further upside potential. Initial support is at 1.4140 ; a break below this level could lead to a return to the current trading range.
From a 4-hour chart perspective, the exchange rate has regained its position above the short-term moving average system, and momentum indicators are showing a moderate upward trend, indicating that the bulls have a slight advantage in the short term. However, overall volatility remains heavily influenced by news, and a clear trend has not yet formed. If the US dollar continues to strengthen supported by data, the exchange rate may further test the 1.43 area; if oil prices rebound, it may limit upside potential and trigger a pullback.
Editor's Summary : The current USD/CAD movement is driven by a combination of a stronger US dollar and weaker oil prices, forming a short-term rebound structure. Geopolitical uncertainty and hawkish expectations from the Federal Reserve are supporting the US dollar, while the decline in oil prices is weakening the Canadian dollar, providing a double boost to the exchange rate. The short-term direction still depends on US employment data and the progress of US-Iran negotiations. If the US dollar continues to dominate and oil prices remain weak, USD/CAD still has room to rise; otherwise, it may enter a high-level consolidation phase.
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