The USD/CAD currency pair extended its weekly uptrend for the fourth consecutive day, reaching a more than two-month high during the early European session on Thursday. Spot prices traded around the 1.3820 region, marking a 0.10% increase for the day, with technical indicators suggesting further appreciation is likely [1]. Persistent geopolitical uncertainties have strengthened the US Dollar's position as the global reserve currency, while elevated energy prices have fueled inflation concerns and increased expectations for a more hawkish US Federal Reserve. These factors have provided additional support for the USD and the USD/CAD pair [1].
Technical analysis reveals a breakout through the 50% Fibonacci retracement level of the November-January decline and a move above the 200-day Exponential Moving Average (EMA), which are seen as key triggers for USD/CAD bulls. The momentum remains positive, with the MACD line above the signal line and a modestly positive histogram. The Relative Strength Index (RSI) at 67 indicates firm upside pressure but remains below overbought territory, validating the near-term bullish outlook. Initial resistance is identified at the 61.8% Fibonacci retracement level at 1.3882, followed by the 78.6% level at 1.3990, which are the next upside targets if buyers maintain control [1].
On the downside, immediate support is at the 50% retracement level at 1.3806. A break below this could expose the 38.2% retracement at 1.3729, with prior reaction highs adding significance. Further downside could see the 23.6% retracement at 1.3635, which would undermine the current bullish tone [1].
The US Dollar was the strongest against the New Zealand Dollar today, with a 0.14% gain, and showed a 0.06% increase against the Canadian Dollar. The heat map of major currencies indicates the USD's relative strength across the board, supporting the bullish momentum in USD/CAD [1].
CONCLUSION
USD/CAD has maintained bullish momentum, breaking key technical levels and reaching a two-month high amid geopolitical uncertainty and hawkish Fed expectations. Technical indicators and currency performance suggest further upside potential, with resistance and support levels framing the next moves. The market takeaway is a firm bullish outlook for USD/CAD, supported by both fundamental and technical factors.