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The USD/CAD pair extended its upward trend last week, breaking above the 1.3965 resistance level. Technical indicators suggest a continuation of the bullish bias this week, with the 38.2% retracement level at 1.3981 as a key target. A decisive break above this level could push the pair toward the 61.8% retracement target at 1.4290. Conversely, a drop below 1.3897 support might shift the intraday bias to the downside.
This development is significant for forex traders as USD/CAD remains a key cross in the carry trade and oil-linked markets. The pair's performance is closely tied to crude oil prices and the U.S.-Canada interest rate differential. A sustained move above 1.3981 could trigger broader risk-on sentiment, while a breakdown below 1.3897 might invite short-term volatility.
Traders should monitor the 1.3981 level as a critical technical pivot. If the bullish scenario plays out, the 1.4290 target becomes a focal point. Conversely, a breakdown could test the 1.3700 psychological level. Oil price movements and central bank policy updates will also influence the pair's trajectory in the coming weeks.
