The USD/CAD currency pair traded 0.12% higher to near 1.3695 during the European trading session on Tuesday, as the US Dollar outperformed its peers amid renewed fears that the conflict between the United States and Iran could resume due to stalled negotiations [1]. The US Dollar Index (DXY), which measures the Greenback against six major currencies, was up 0.3% to near 98.20 at the time of reporting [1]. US President Donald Trump commented that Iran's counterproposal to a one-page peace proposal was a 'stupid proposal' and lacked clarity on Tehran's nuclear ambitions, adding that the 'ceasefire is on life support' [1].
Despite the Canadian Dollar underperforming against the US Dollar, it remained firm against other currencies, supported by elevated oil prices, which tend to benefit net oil exporters like Canada [1]. Investors are also awaiting the US Consumer Price Index (CPI) data for April, scheduled for release at 12:30 GMT, which could further impact the USD/CAD pair [1].
From a technical perspective, USD/CAD holds a slight bullish bias, trading above the 20-day exponential moving average (EMA) at 1.3680, suggesting near-term dips are supported [1]. The Relative Strength Index (RSI) around 51 indicates neutral-to-firm momentum, with buyers maintaining a modest edge as the pair consolidates near current levels [1]. If USD/CAD sustains above the April 24 high at 1.3715, it could advance toward the April 14 high at 1.3793. Conversely, a break below the 20-day EMA at 1.3680 could lead to a deeper correction toward the May 7 low of 1.3620 [1].
CONCLUSION
USD/CAD is trading higher, driven by US Dollar strength amid geopolitical tensions and anticipation of US CPI data. Technical indicators suggest a modest bullish bias, with potential for further gains if key resistance levels are breached. Market participants are closely watching upcoming economic data for additional direction.