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The USD/CAD pair remains range-bound near a one-month low of 1.3525 as Canadian Dollar (CAD) bulls face headwinds from falling oil prices, a key driver of the Canadian economy. Despite a weaker U.S. Dollar (USD) typically supporting CAD, the pair has struggled to gain momentum, reflecting market uncertainty ahead of the U.S. CPI data release. Traders are closely monitoring the interplay between energy prices and USD strength, with oil sliding below $80/barrel adding pressure on CAD. For forex traders, the USD/CAD's consolidation near critical support levels creates a wait-and-see stance. A break below 1.3525 could trigger further CAD weakness, while a rebound might test resistance at 1.3650. The upcoming U.S. CPI report on Thursday will be pivotal, as stronger-than-expected inflation could reverse USD weakness and shift risk appetite. The broader implications for commodity-linked currencies like CAD are significant. With oil prices at multi-month lows and the USD showing mixed signals, Gulf investors should monitor how central banks in Canada and the U.S. respond to energy-driven economic pressures. Key technical levels and the Fed's policy trajectory will shape the next phase of USD/CAD volatility.
