• USD/CAD bounces off a three-week trough amid a combination of supporting factors.
• Softer Oil prices undermine the Loonie and lend support amid a modest USD recovery.
• The technical setup favors bearish traders as the focus shifts to Canadian jobs report.

The USD/CAD pair stages a modest intraday recovery from the 1.4135 area, or a three-week low touched this Friday, and climbs to the top end of its daily range during the early European session. Spot prices currently trade around the 1.4160 region, nearly unchanged for the day, as traders now look forward to Canadian monthly employment details for a fresh impetus.

In the meantime, a weaker tone around Crude Oil prices undermines the commodity-linked Loonie. The US Dollar (USD), on the other hand, bounces off over a one-week low amid prospects of at least one interest rate hike by the US Federal Reserve (Fed) in 2026 and concerns about a fresh escalation of tensions in the Middle East. This, in turn, assists the USD/CAD pair in attracting some buyers at lower levels.

From a technical perspective, spot prices now seem to have found acceptance below the 100-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, an intraday break below the lower boundary of a three-week-old trading range, near the 1.4150 area, could be seen as a key trigger for the USD/CAD pair. However, the lack of follow-through warrants caution before positioning for further losses.

Meanwhile, the Moving Average Convergence Divergence (MACD) remains marginally negative, and the Relative Strength Index (RSI) hovers just below the 50 line near 43. Momentum indicators together hint at subdued upside momentum and leaving the path of least resistance tilted to the downside. Hence, any further recovery could be seen as a selling opportunity and is more likely to fizzle out rather quickly.

On the topside, initial resistance is aligned with the 100-period SMA around 1.4190. A clear break above this level would be needed to ease the current bearish pressure and allow a recovery toward the trading range resistance, near mid-1.4200s, or the highest level since April 2025, touched last month. On the downside, 1.4100 now could act as an immediate support ahead of 1.4025 and the 1.4000 psychological mark.

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

USD/CAD 4-hour chart