USD/CAD Breakout Imminent as Geopolitical Risks Fuel Greenback Gains

The USD/CAD pair has continued its recovery move from a three-month low of 1.3730, reached last week, and is gaining positive traction for the second straight day.

This upswing is attributed to several supporting factors, including geopolitical risks and inflation-driven Fed rate hike bets that benefit the safe-haven Greenback.

The US-Canada trade war and softer oil prices are also undermining the Loonie, lending additional support to the pair.

From a technical perspective, an intraday move above the 23.6% Fibonacci retracement level of the June-August decline could be seen as a key trigger for bullish traders.

The Relative Strength Index (14) is hovering near 62 and Moving Average Convergence Divergence (MACD) readings are in positive territory, indicating that buyers are attempting to stabilize the USD/CAD pair.