The USD/CAD currency pair extended its weekly uptrend for the third consecutive day, reaching its highest level since July 29 during the early European session on Wednesday [1]. Market participants are now watching for a potential move above the 1.4100 round figure, which could pave the way for further gains, supported by a favorable fundamental backdrop [1].
A significant factor undermining the Canadian Dollar (Loonie) is the decline in crude oil prices, which have fallen to their lowest level in over two weeks. This drop is attributed to hopes for a diplomatic resolution to the US-Iran war and the reopening of the Strait of Hormuz, both of which have weighed on the commodity-linked Loonie [1]. In contrast, the US Dollar has reached a new high since July 30, bolstered by the Federal Reserve's hawkish outlook, further driving the USD/CAD pair higher [1].
From a technical standpoint, the recent breakout above the 100-day Simple Moving Average (SMA) at 1.3958 served as a key trigger for bullish traders. The subsequent advance beyond the 61.8% Fibonacci retracement at 1.4051 reinforces the bullish near-term bias and supports the outlook for an extension of the uptrend [1]. The Moving Average Convergence Divergence (MACD) indicator remains in positive territory, suggesting persistent upward momentum, while the Relative Strength Index (RSI) at 68.4 indicates that the pair is approaching overbought conditions, hinting at a possible consolidation phase rather than an immediate reversal [1].
Immediate resistance is seen at the 78.6% retracement level near 1.4137, with the cycle high at 1.4246 representing a stronger supply zone. On the downside, initial support lies at the 61.8% retracement at 1.4051, followed by the 50.0% retracement at 1.3991, the 100-day SMA at 1.3958, and further Fibonacci support levels at 1.3931, 1.3857, and 1.3736 [1]. A decisive break below these supports would be required to negate the current bullish structure [1].
According to the weekly performance table, the US Dollar has been the strongest against the Canadian Dollar among major currencies this week, with a 0.68% gain [1].
CONCLUSION
USD/CAD continues its strong uptrend, driven by weak oil prices and a hawkish Fed, with technical indicators supporting further gains toward 1.4100. However, overbought signals suggest a potential consolidation phase. The US Dollar's outperformance against the Canadian Dollar underscores the pair's bullish momentum.