USDCAD is currently trading near 1.38000. Over the past week, the Canadian dollar has drawn support from rising risk appetite amid lingering hopes of a ceasefire extension between the United States and Iran. This environment has pushed the pair into a mild correction, pulling it back from recent peaks.
On the fundamental front, the American economy remains far more resilient than its Canadian counterpart. The Federal Reserve’s (Fed) projected monetary path suggests that no more than one rate cut is likely this year. Meanwhile, the Bank of Canada’s (BoC) borrowing costs are at 2.25%, reflecting significant economic uncertainty driven by tense trade relations with the US and the potential fallout from new tariffs.
The technical setup points to further upside. The pair has been moving within an ascending channel for a month and is now approaching the lower boundary—a level from which prices have rebounded. This could serve as additional confirmation of the current trend's strength. The pair’s next target is likely to be 1.39500—the highest level over the year.
The final recommendation:
— Buy USDCAD at the current price, aiming for 1.39500 within a month.
— Place Stop Loss at 1.37250, just below support, to manage risks if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
