USDCAD is poised to take breather by week’s end before resuming its rise

As of April 24, 2026, the USDCAD pair is climbing back to the 1.3700 level after forming a local bottom. The dollar is gaining strength from ongoing geopolitical concerns surrounding the Strait of Hormuz. Failed peace talks and renewed tensions between the United States and Iran have revived market appetite for safe-haven assets, helping the greenback stand out from the crowd of commodity-linked currencies.

Now, let’s shift our focus to Canada. The national economy looks overheated due to external shocks. A recent rally in energy costs pushed the Producer Price Index (PPI) up to 2.4%, leaving the central bank with little choice but to maintain a hawkish tone. However, these conditions have not benefited the loonie. Its growth is capped by stubborn inflation and uncertain trade relations with the US. Looming stagflation risks put serious fundamental pressure on the Canadian dollar.

America, by contrast, appears more resilient to energy shocks. Fresh labor market data showed only a modest increase in jobless claims, while the Composite Purchasing Managers’ Index (PMI) came in above expectations. These reports suggest that the Federal Reserve (Fed) is unlikely to rush into policy easing, keeping interest rates unchanged through the end of 2026 and strengthening the US dollar.

From a technical perspective, we see a recovery in USDCAD after it dipped to local lows. At the same time, today’s candle points to consolidation near 1.37076. Momentum indicators confirm this picture. The Stochastic Oscillator has just exited oversold territory and is approaching overbought levels—a setup that could trigger profit-taking and a subsequent pullback. Meanwhile, the Average Directional Movement Index (ADX) has declined from its April 21 peak to 34, signaling waning bearish momentum, which is also reflected in the falling -DI line (now at 27) and rising +DI (now at 12).

Consider the following trading strategy:

Buy USDCAD near 1.36660 during a pullback ahead of the weekend. Place Take profit at 1.37500. Set Stop loss at 1.36260.

This forecast remains relevant between April 24 and May 1, 2026.