USD/CAD Bounces from Oversold Levels Amid Trade Tensions

The Canadian Dollar has seen a strong bounce in recent days after reaching oversold conditions on the daily chart. This sell-off, which began in mid-July, pushed USD/CAD below its support level at 1.4150 and into overbought territory for the first time since January.

This weekend's trade restrictions between the U.S. and Canada have contributed to the Canadian Dollar's decline, with prices dropping as a result of the prospect of more tariffs. However, it is unclear whether this bounce is due to short covering or legitimate buying pressure.

To confirm topside continuation potential on USD/CAD, we need to see a higher-low formation on the four-hour chart. Key resistance levels include 1.3795, 1.3756, and 1.3732, while prior support-turned-resistance at 1.3908 stands out as a potential next hurdle.