The Loonie is Fighting Back: USDCAD Price Analysis after Ceasefire Talks
- The Loonie pair USDCAD slid from 1.3965 to a low near 1.3800
- Both the US dollar and Canadian dollar face competing pressures
- Failed US-Iran peace talks triggered a sharp rebound in oil prices, pushing back Loonie
- Trend bias is bearish, with possible targets around 1.33 and 1.29.
What Is Driving USD/CAD Right Now?
US-Iran ceasefire talks boosted the USDCAD pair, but then the collapse pulled it back. Here are all the key price drivers now-
US-Iran Ceasefire Talks and Collapse
Despite nearly 21 hours of negotiations in Pakistan, high-level US-Iran talks ended without a breakthrough. The failed talks triggered a sharp rally in crude oil prices, which undermined the Canadian dollar.
“Discussions have made tremendous progress, and the current ceasefire holds for a seventh consecutive day,” said US Vice President (VP) JD Vance.
Oil Price: Canada’s Biggest Currency Driver
The loonie moves closely with oil prices because Canada is the largest crude oil exporter to the United States. As WTI crude has jumped above $86 per barrel due to the Hormuz blockade, concerns about shipping securities like the Persian Gulf and support for the Canadian Dollar have been renewed, so this has made USDCAD stuck in a range.
US vs Canada: Policy Gap Matters
US and Canadian job data and inflation data are also having a significant impact on the Loonie pair. The US economy’s March job data showed an increase compared to that of Canada. Core inflation data increased to 3.1% in the US economy, while the Canadian inflation rate decreased to 2.4%. This gap created more support for USD.
Technical Indicators
USD/CAD is currently trading above its 50-day EMA at 1.3681. The RSI is hovering near the 50 midline, showing no strong momentum.
Resistance: 1.3725 to 1.3794 (200-day EMA) to 1.3850
Support: 1.3680 (50-day EMA) to 1.3660 to 1.3541 (major trough)
What Should Traders Do Now?
USD/CAD is currently in a situation to anticipate no clear trend. So, here is what could break the range in either direction-
- If the Strait of Hormuz opens, oil may fall and weaken CAD; if it stays closed, high oil prices can support CAD.
- The Bank of Canada (BoC) may keep rates at 2.25%, but a surprise rate hike could strengthen CAD.
- A break above the 1.3725 level may push USD/CAD to 1.39; staying below supports CAD.
- Institutional investors are starting to buy CAD again, signaling a possible medium-term trend shift.
For USD/CAD traders, this is a range-trade environment. Buy dips near 1.3660–1.3680 support and sell rallies near 1.3720–1.3750 resistance until a clear trend breakout.
