• USD/CAD struggles to capitalize on intraday gains amid a combination of negative factors.
• Rallying Oil prices underpin the Loonie, while stagflation fears prompt some USD selling.
• The technical setup favors bearish traders and backs the case for a further depreciation.

The USD/CAD pair attracts some sellers following a modest Asian session uptick to the 1.3675 area and currently trades just above a two-week low, touched on Friday.

Crude Oil prices stick to strong intraday gains of over 5% amid concerns about supply disruptions following the US-Israel strikes against Iran and the closure of the Strait of Hormuz – a critical maritime chokepoint. This, in turn, underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair.

Meanwhile, the US Dollar (USD) retreats from its highest level since January 23 as a stronger US Producer Price Index (PPI) for January and slowing economic growth revive stagflation fears. This, in turn, exerts some pressure on the USD/CAD pair, though the global flight to safety could limit losses for the safe-haven buck.

From a technical perspective, the near-term bias is mildly bearish as the USD/CAD pair holds below the gently descending 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, the recent attempts to recover remained capped beneath that reference, validating the near-term negative outlook for the pair.

The Relative Strength Index (RSI) hovers around 40, showing soft downside momentum rather than capitulation. The Moving Average Convergence Divergence (MACD) line remains below its Signal line and under the zero mark, with a modest negative histogram, which reinforces a controlled bearish tone rather than an impulsive selloff.

Immediate resistance emerges at the 1.3690/1.3700 zone, where the 200-period SMA aligns with a recent consolidation ceiling; a 4-hour close above this area would be needed to ease downside pressure and open a move toward 1.3740.

On the downside, initial support is seen near 1.3630, guarding last week’s pullback base, followed by 1.3590 if sellers extend control. As long as price trades beneath the 200-period SMA, rallies are vulnerable to renewed selling into the aforementioned resistance band.

(The technical analysis of this story was written with the help of an AI tool.)

USD/CAD 4-hour chart