What's fueling USD/CAD's sustained upward momentum?solana wallet download
The USD/CAD currency pair continues its impressive ascent, marking five straight trading days of gains as Monday's session progresses. This sustained bullish movement reflects shifting market dynamics influenced by both geopolitical developments and commodity price fluctuations.
Several critical factors are contributing to this trend:
Heightened demand for safe-haven currencies following escalated US involvement in Middle Eastern conflicts
Recent military actions targeting Iranian nuclear facilities have amplified global risk aversion
Potential supply disruptions in key oil shipping lanes supporting crude prices
The US Dollar Index (DXY), which measures the greenback against a basket of major currencies, has surged toward the 99.10 level, reflecting broad-based dollar strength. This comes after Washington confirmed precision strikes on three Iranian nuclear sites over the weekend, significantly raising geopolitical tensions.
Market participants remain cautious about possible retaliatory measures that could disrupt oil shipments through the Strait of Hormuz - a critical waterway handling approximately 25% of global crude shipments. Such developments typically benefit commodity-linked currencies like the Canadian dollar, though the current risk-off environment appears to be favoring the US dollar more strongly.
From a technical perspective, USD/CAD has rebounded impressively from its eight-month low near 1.3540 recorded on June 16. The pair's recovery above the 20-day Exponential Moving Average suggests a potential trend reversal, with momentum indicators like the 14-day Relative Strength Index (RSI) showing bullish signals as it approaches the 50.00 threshold.
Looking ahead, traders are watching several key levels:
Resistance may emerge near the May 29 peak of 1.3820
Further upside could target the May 21 high at 1.3920
The psychological 1.4000 level remains a significant barrier
Conversely, a break below Monday's low of 1.3540 might open the door for a test of the 1.3500 support level, with potential to revisit the September 25 bottom near 1.3420. The interplay between geopolitical risks and oil market dynamics will likely continue driving USD/CAD price action in coming sessions.
