USD\/CAD has kept moving higher as demand for the US Dollar has supported the pair. It is trading well above an estimated fair value of 1.3543.<\/p>\n
The Canadian Dollar has weakened, with trading described as low volume and low conviction. The move has been linked to broad US Dollar demand.<\/p>\n
Some fundamentals have shifted against the Canadian Dollar, with front-end spreads widening in the US Dollar\u2019s favour. Canadian terms of trade have also softened.<\/p>\n
USD\/CAD has pushed through the low 1.38 area and moved above the 200-day moving average, which is at 1.3805. Short-term technical signals remain bullish after this break.<\/p>\n
Further gains are said to be possible towards the low 1.39s. Support levels are noted at 1.3790\/00 and 1.3750\/60.<\/p>\n
The report states the pair advanced through resistance in the mid-1.37s and then the low 1.38s. It also notes the article was produced with help from an artificial intelligence tool and reviewed by an editor.<\/p>\n
Looking back at the analysis from 2025, we recall the view that the US dollar’s haven status was the primary force driving USD\/CAD higher. The pair was trading significantly above its estimated fair value, breaking cleanly above key technical levels like the 200-day moving average. This created a clear bullish signal for the market at the time.<\/p>\n
Given the strong upward momentum observed last year, the move towards the low 1.39s was a credible target. This environment favored strategies like buying USD call options or selling CAD put options to profit from the expected rise. The defined support levels around 1.3750\/60 offered clear points to manage risk on these bullish positions.<\/p>\n
The fundamental justification for that trend became reality as interest rate differentials widened through late 2025. The U.S. Federal Reserve maintained a hawkish stance due to persistent core inflation, which averaged 3.1% in the final quarter of 2025, while the Bank of Canada signaled a more dovish tilt. This policy divergence was a powerful catalyst that fueled the USD’s outperformance against the CAD.<\/p>\n
Furthermore, we saw Canadian terms of trade weaken as WTI crude oil prices slid to nearly $70 per barrel in December 2025. This contrasted with a resilient US economy that continued to post stronger job numbers than anticipated. These factors provided little independent support for the Canadian dollar, forcing it to follow the broader, strong-USD trend.<\/p>\n
As of today, March 26, 2026, the situation has evolved, with USD\/CAD consolidating around the 1.36 handle. With WTI crude recovering to over $82 a barrel and recent Canadian inflation data for February 2026 showing a surprising uptick, the intense bullish pressure from last year has eased. We must now question whether the peak of USD dominance from that period has passed.<\/p>\n
In the coming weeks, traders should watch for a potential shift in this dynamic. While the bullish trend of 2025 was profitable, the current consolidation suggests a more balanced market. It may be prudent to consider strategies that can profit from either a range-bound environment or a new directional break, such as selling out-of-the-money strangles.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CAD climbs above 200-day average amid broad US Dollar demand; weak Canadian fundamentals signal potential 1.39s.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-45633","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/45633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=45633"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/45633\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=45633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=45633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=45633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}