News
7x24
Quotes
Economic Calendar
Video
Data
- Names
- Latest
- Prev.
USD/CAD Climbs to Session Highs as Oil Slumps and Fed Dovishness Caps Dollar Rally
Traders' Opinions
Summary:
The Canadian dollar is under pressure amid weakening crude oil prices, which hover near two-month lows as optimism about Ukraine peace talks sparks hopes for eased Russian energy sanctions.
Buy
CLOSEDUSDCAD
End Time
1.37900
Entry Price
1.38800
TP
1.37200
SL
1.37375 -0.00114 -0.08%
117
Points
Profit
1.37200
SL
1.38017
CLOSING
1.37900
Entry Price
1.38800
TP
The Canadian dollar (CAD) is struggling to find footing on Monday, slipping against the US dollar (USD) amid a subdued trading environment marked by depressed crude oil prices. The USD/CAD pair has climbed to intraday highs around 1.3770, reflecting a combination of bearish sentiment toward the Loonie and cautious US dollar strength. However, overall market activity remains relatively muted as traders await key US inflation data later this week.
At the heart of the Canadian dollar’s weakness lies the persistent slump in crude oil prices, which have fallen to their lowest levels since early June. Brent crude recently traded near $77 per barrel, retreating on renewed hopes that diplomatic progress in the ongoing Ukraine peace negotiations could lead to a rollback or easing of Western sanctions on Russian energy exports. Such developments would risk a surge in global oil supply, exerting further downward pressure on prices.
For Canada — a major crude oil exporter — oil price dynamics are a critical driver of the Loonie’s fortunes. The Canadian economy’s heavy reliance on energy exports means that sustained weakness in crude prices typically translates into a softer Canadian dollar, as investors adjust their outlook for Canada’s trade balance and economic growth.
Despite efforts by the Organization of the Petroleum Exporting Countries (OPEC) and allied producers to limit supply, the prospect of Russian sanctions being lifted or eased has cast a shadow over the market. As a result, the Loonie remains vulnerable in the near term, with traders reluctant to commit to a bullish stance until the oil market stabilizes.
On the flip side, the US dollar is attempting to regain some ground after recent soft patches, buoyed by increasing market expectations that the Federal Reserve will pivot to easing monetary policy before the end of the year. Investors are now pricing in an 88% probability of a 25 basis point rate cut at the Fed’s September meeting, followed by at least one more before December.
Fed officials have contributed to these dovish expectations. Last Friday, Federal Reserve Governor Michelle Bowman emphasized labor market softness, citing signs of cooling that could warrant rate reductions. Similarly, St. Louis Fed President James Bullard downplayed the inflationary impact of tariffs, signaling less urgency for aggressive rate hikes.
However, while these dovish signals have capped the dollar’s upside, they also place significant importance on the US Consumer Price Index (CPI) report scheduled for release on Tuesday. The consensus forecast anticipates an acceleration in consumer price inflation, which, if confirmed, could dampen hopes of imminent Fed easing and bolster the US dollar.
Market participants are thus bracing for volatility around Tuesday’s data, which will serve as a litmus test for the Federal Reserve’s policy trajectory in the coming months.
Technical Analysis
From a technical perspective, USD/CAD appears poised for further upward movement. The pair recently formed a classic triple bottom reversal pattern, successfully breaking above its neckline resistance and currently retesting this level for support — a bullish signal that often precedes a price rally.
Key technical levels to watch include a pivot point at 1.3687, with initial support at 1.3563. On the upside, resistance is expected around 1.3880. Traders should monitor the pair’s behavior around the neckline retest closely, as a confirmed bounce could open the door to a sustained upward trajectory toward resistance levels.
TRADE RECOMMENDATION
BUY USDCAD
ENTRY PRICE: 1.3790
STOP LOSS: 1.3720
TAKE PROFIT: 1.3880
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
Quick Access to 7x24
Quick Access to More Editor-selected Real-time News
Exclusive video for free
FastBull project team is dedicated to create exclusive videos
Real-time Quotes
View more faster market quotes
More comprehensive macro data and economic indicators
Members have access to entire historical data, guests can only view the last 4 years
Member-only Database
Comprehensive forex, commodity, and equity market data
English
English
العربية
繁體中文
简体中文
Bahasa Melayu
Bahasa Indonesia
ภาษาไทย
Tiếng Việt
Copyright © 2025 FastBull Ltd
Home News Columns 7x24 Economic Calendar Quotes Video Data WarehouseAnalysis AI Signal Pro User Agreement Privacy Policy About Us
Risk Disclosure
The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.
Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.