USDCAD is trading around 1.36700, having retreated modestly from its local peak at 1.37240 on February 24. The catalyst for the pullback came from an unlikely corner: the US Supreme Court. By lifting tariffs enacted during the Trump era, the ruling effectively stripped the American President of a key tool for dramatic political maneuvering, briefly undermining the dollar's appeal.
Yet, despite the greenback's hesitation, the loonie is in no position to celebrate. CAD remains pinned down by a mix of lackluster internal data and ongoing global uncertainty. In fact, the USMCA talks continue to hover over the country like a storm cloud, while the domestic economy shows few signs of life. January's inflation reading slipped to 2.3%, and with fourth-quarter (Q4) GDP expected to disappoint on Friday, the Bank of Canada (BoC) is feeling the heat to ease monetary policy further.
This week's spotlight, however, shifts to Geneva. Thursday's Iran negotiations are seen as a wild card for the market with the power to move oil and, by extension, the loonie. Crude is clinging to multi-month highs, and for now, this strength is the only thing standing between the Canadian dollar and its deeper slide. Fuel effectively caps the pair's upside, at least until the diplomatic dust settles.
A technical picture reinforces this cautious undertone. After rallying cleanly from 1.35029 to 1.37237, bullish momentum began to stall. Stochastic lines (%K=55, %D=59) have recently crossed in neutral territory, suggesting that buyers are losing their grip. Meanwhile, the Chaikin Oscillator has turned negative and formed a bearish divergence with the price—an early warning that the currency pair may be running on fumes.
The following plan may come into play for your trading activities:
Wait for the price to drop to 1.36600, and then buy USDCAD. Further upside potential for oil appears limited at current levels, as does CAD support. Place Take Profit at 1.37990. Set Stop Loss at 1.35990.
This forecast holds true from February 25 till March 4, 2026.
This content is for informational purposes only and is not intended to be investing advice.
