USDCAD is bouncing from critical support, but the big question is whether oil prices can fuel the next leg higher this month.
In today’s video, I break down the key levels for USDCAD, the US Dollar Index (DXY), and WTI oil.
Two days ago, I highlighted how USDCAD was entering a confluence of support near 1.4350, setting up for a critical decision by Thursday.
This area marked the intersection of recent range lows and the September trend line, signaling a decisive move was imminent.
Today, USDCAD is bouncing from that support, showing a decent rally so far.
However, the real test for bulls lies at the 1.4450 range highs.
This level has challenged buyers since mid-December, making a high time frame close above it essential to expose higher levels.
One target I’ve been watching for months is the decade-long range highs at 1.4670.
This level, dating back to January 2016, marks the top of an equidistant range for USDCAD, with support extending from the 2015 low.
While there’s no guarantee USDCAD reaches 1.4670, the level’s significance suggests a retest is likely.
The key question is whether the US dollar has enough momentum to push the pair there.
One catalyst that could push USDCAD higher is WTI oil.
Although the Canadian dollar has struggled against the US dollar, surging oil prices have offered some support since December.
If oil pulls back, the Canadian dollar could weaken, paving the way for USDCAD toward my final target at 1.4670.
The question is whether WTI will retreat this month.
Given the recent bullish momentum, a pullback may be difficult, but the $78-$79 support zone is critical this week.
If that support area fails on the daily and weekly charts, a WTI pullback will seem likely.
For USDCAD, I remain long with an average rate of 1.4326, targeting 1.4450 and 1.4670.
Only a sustained break below 1.4335 and 1.4265 would invalidate my bullish outlook.