USDCAD hits 14-month highs on resilient US economy

USDCAD continues to rally, reaching 1.4150 during early June 19 trading. The pair managed to surpass 14-month highs thanks to a shift in market expectations regarding the Federal Reserve’s (Fed) monetary path. Nearly half of the committee now forecasts an interest rate hike by year-end. Previously, most officials anticipated the opposite: a more dovish move. Such a dramatic turnaround has pushed the US dollar higher.

In the meantime, its Canadian counterpart is feeling the pinch of lower crude prices. Oil remains the country’s key export commodity. An interim peace agreement between the United States and Iran has led to the gradual normalization of shipping through the Strait of Hormuz, weighing on energy costs. Global supply is expected to recover soon, as massive fuel volumes return to the market, undermining the loonie’s stability.

Fresh American data are also working in the greenback’s favor: May retail sales significantly exceeded forecasts, while initial jobless claims fell, signaling that the labor market remains resilient. This reinforces the case for a more hawkish Fed policy and widens the yield spread between American and Canadian government bonds.

Another headwind for the Great White North is the tense trade talks with its neighbor, particularly in the context of a potential revision of the USMCA.

From a technical standpoint, USDCAD keeps rallying on Friday morning. The Chaikin Oscillator sits at a high level comparable to those from which corrective pullbacks began earlier (in late April and May). This suggests the risk of another decline. At the same time, large bullish candles without long upper shadows indicate that buyers are in control and there are no signs of a trend reversal. It is more likely that we are now witnessing a technical breather, or a pullback within a broader uptrend.

Consider the following trading strategy:

Buy USDCAD during a short-term correction within the 1.41100–1.40500 range. Place Take profit at 1.42150. Set Stop loss at 1.40050.

This forecast remains relevant between June 19 and June 26, 2026.