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The USD/CAD pair has extended its losing streak to nine days, dropping below the 50-day simple moving average (SMA) as elevated oil prices bolster the Canadian dollar (loonie). The pair is correcting from a year-to-date high of 1.3965 set in late March, with technical indicators like RSI and stochastics entering oversold territory. This decline reflects weakened demand for the US dollar amid mixed economic data and ongoing geopolitical tensions affecting energy markets.
For traders, the breakdown below 1.3700 raises concerns about further downside toward key support levels at 1.3500. The move underscores the sensitivity of the USD/CAD to oil prices, which remain a critical driver for the loonie. Technical weakness in momentum indicators suggests potential for a short-term bearish bias, though volatility could increase if the US Federal Reserve signals tighter monetary policy.
Looking ahead, investors should monitor OPEC+ supply decisions and US inflation data for clues about USD direction. The CAD’s correlation with crude oil also means any shifts in energy prices could amplify USD/CAD movements. Traders may need to reassess risk exposure as the pair approaches critical technical levels.
