The Canadian Dollar (CAD) stayed fairly steady against a stronger US Dollar (USD). It held up better than many major currencies, helped by stable risk mood and record levels in the S&P 500.<\/p>\n
Moves in the CAD were limited, with little domestic news to drive trading. Day-to-day direction was tied mainly to the wider USD trend and the market risk backdrop.<\/p>\n
Stocks were slightly lower in early trading, after the S&P 500 reached another record high the day before. The USD\/CAD rate rose for a third day, but the short-term setup was still described as bearish.<\/p>\n
The USD move was framed as a small rebound from Tuesday\u2019s low, with patterns such as a bear flag or wedge mentioned. Trend indicators were said to remain bearish across intraday, daily, and weekly timeframes.<\/p>\n
Resistance for USD\/CAD was placed in the low to mid-1.37 area. Support was seen at 1.3625, with the next level described as the low 1.35s.<\/p>\n
The Canadian Dollar is showing notable resilience, outperforming other major currencies against the US Dollar. This strength is supported by robust risk sentiment, with the S&P 500 closing above 5,900 last week. It suggests that positive market mood is currently outweighing broad USD strength for the CAD.<\/p>\n
Given the weak technical backdrop for USD\/CAD, we see the current minor bounce as an opportunity to position for further downside. We view any move into the low-to-mid 1.37s as a strong selling zone for entering short futures positions or buying put options. Trend indicators across weekly and daily charts reinforce this bearish bias.<\/p>\n
Fundamentally, the CAD is underpinned by firm WTI crude prices, which have held above $85 per barrel this month. Canada\u2019s latest CPI reading for March 2026 came in at a stubborn 2.9%, suggesting the Bank of Canada may remain hesitant to cut rates ahead of the Fed. This policy divergence gives the CAD a supportive yield advantage.<\/p>\n
This marks a significant shift from the market dynamics we observed in 2025, when aggressive Fed tightening consistently pushed the USD higher. The failure of USD\/CAD to break and hold above the 1.38 level earlier this year indicates that the upward momentum from last year has faded. Traders should adjust for this new regime.<\/p>\n
For traders using options, consider establishing bearish positions like bear put spreads to cap risk while targeting a move lower in the pair. The initial support at 1.3625 serves as a first target, with a fuller move toward the low 1.35s being the ultimate objective in the coming weeks. Monitor these levels closely as potential profit-taking zones.<\/p>\n
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