USD/CAD Breaks Higher on Hawkish Fed and Softening Oil

The USD/CAD currency pair has seen significant gains in recent days, rising more than 1% this month. The price broke above its ascending channel near 1.3880 and is currently trading around 1.4020. This level is being viewed as a potential near-term cap.

The US Federal Reserve's hawkish rate rise and expectations of further tightening have contributed to the dollar's strength, with the DXY holding steady around 100.00. In contrast, Canada's recent inflation data were broadly in line with expectations, but oil prices have been a headwind for the Canadian dollar.

The Average Directional Index (ADX) is currently at 48, indicating an incredibly strong trend. This suggests that the USD/CAD pair is likely to continue moving upwards, with potential targets including the 1.4100 and 1.4200 levels.