The tense situation in the Middle East and the rising demand for safe-haven U.S. dollars have led to a three-day rise in the U.S. dollar against the Canadian dollar
2025-06-19 13:49:59
USD/CAD rebounded strongly after hitting an eight-month low of 1.3540 on Monday and is currently trading at 1.3710, approaching the 20-day exponential moving average near 1.3715. Rising risk aversion in the market boosted the U.S. dollar index (DXY) to 99.10, pushing the U.S. dollar stronger against major currencies.
The situation in the Middle East further escalated, and the market risk aversion quickly heated up, benefiting the US dollar as a safe-haven currency. In contrast, the Canadian dollar was limited in its upside by factors such as the mild performance of international oil prices and the rising market risk aversion.
Tiff Macklem, governor of the Bank of Canada, said during the G7 summit that the US may withdraw tariffs once a trade agreement is reached. He said that if the tariffs remain unchanged, it will increase the upward pressure on inflation. However, Canada has a positive expectation of reaching an agreement within 30 days, which slightly eases the pressure on the Canadian dollar.
"If the United States and Canada successfully sign a trade agreement, the Canadian dollar is expected to stabilize in the medium term, but in the short term it will still be limited by the strengthening of the safe-haven U.S. dollar." - Comment by a local Canadian financial analysis agency
From the daily level, the U.S. dollar against the Canadian dollar (USD/CAD) has risen for three consecutive days after rebounding from the eight-month low of 1.3540. It is currently approaching the 20-day exponential moving average (EMA) near 1.3715, and the short-term momentum has increased.
The 14-day relative strength index (RSI) rebounded above 40, indicating that the previous short-term momentum has weakened, but the overall trend has not yet been completely reversed. If the exchange rate breaks through the 1.3715-1.3820 resistance range, it will confirm the short-term bottoming and is expected to further test 1.3920 or even 1.4000;
On the contrary, if it falls under pressure again and falls below 1.3540, the downside space will be reopened, with the target pointing to the 1.3500 and 1.3420 support areas.
Editor's opinion:
The current USD/CAD trend is obviously affected by the risk aversion sentiment and optimistic expectations for trade negotiations. In the short term, under the dominance of Middle East geopolitical risks, the strong US dollar will continue to dominate the market, and it is expected that there is still some room for the exchange rate to rise.
However, if the United States and Canada can reach an agreement within 30 days, oil prices stabilize, or the Federal Reserve turns to a dovish stance, it may provide support for the Canadian dollar. Pay close attention to the 1.3820 technical resistance level and subsequent changes in the situation in the Middle East. If the breakthrough fails, the exchange rate may retest the 1.3600-1.3540 area.
The situation in the Middle East further escalated, and the market risk aversion quickly heated up, benefiting the US dollar as a safe-haven currency. In contrast, the Canadian dollar was limited in its upside by factors such as the mild performance of international oil prices and the rising market risk aversion.
Tiff Macklem, governor of the Bank of Canada, said during the G7 summit that the US may withdraw tariffs once a trade agreement is reached. He said that if the tariffs remain unchanged, it will increase the upward pressure on inflation. However, Canada has a positive expectation of reaching an agreement within 30 days, which slightly eases the pressure on the Canadian dollar.
"If the United States and Canada successfully sign a trade agreement, the Canadian dollar is expected to stabilize in the medium term, but in the short term it will still be limited by the strengthening of the safe-haven U.S. dollar." - Comment by a local Canadian financial analysis agency
From the daily level, the U.S. dollar against the Canadian dollar (USD/CAD) has risen for three consecutive days after rebounding from the eight-month low of 1.3540. It is currently approaching the 20-day exponential moving average (EMA) near 1.3715, and the short-term momentum has increased.
The 14-day relative strength index (RSI) rebounded above 40, indicating that the previous short-term momentum has weakened, but the overall trend has not yet been completely reversed. If the exchange rate breaks through the 1.3715-1.3820 resistance range, it will confirm the short-term bottoming and is expected to further test 1.3920 or even 1.4000;
On the contrary, if it falls under pressure again and falls below 1.3540, the downside space will be reopened, with the target pointing to the 1.3500 and 1.3420 support areas.
Editor's opinion:
The current USD/CAD trend is obviously affected by the risk aversion sentiment and optimistic expectations for trade negotiations. In the short term, under the dominance of Middle East geopolitical risks, the strong US dollar will continue to dominate the market, and it is expected that there is still some room for the exchange rate to rise.
However, if the United States and Canada can reach an agreement within 30 days, oil prices stabilize, or the Federal Reserve turns to a dovish stance, it may provide support for the Canadian dollar. Pay close attention to the 1.3820 technical resistance level and subsequent changes in the situation in the Middle East. If the breakthrough fails, the exchange rate may retest the 1.3600-1.3540 area.
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