USD/CAD Pair Extends Uptrend to New High
The USD/CAD pair has extended its weekly uptrend for three consecutive days, reaching a new high since July 29 during the European session on Wednesday. The bulls are now waiting for a move beyond the 1.4100 level before positioning for further gains, supported by a favorable fundamental backdrop.
Crude oil prices have declined to an over two-week low due to hopes of a diplomatic resolution between the US and Iran, as well as the reopening of the Strait of Hormuz. This has weakened the commodity-linked Canadian dollar. Meanwhile, the US dollar has hit a fresh high since July 30 following the Federal Reserve's hawkish outlook.
From a technical perspective, the breakout above the 100-day Simple Moving Average at 1.3958 was seen as a key trigger for bullish traders. The advance beyond the 61.8% Fibonacci retracement at 1.4051 has underpinned a bullish near-term bias, validating the constructive outlook for the USD/CAD pair.
However, the Relative Strength Index (RSI) at 68.4 is flirting with overbought conditions, suggesting that the rally may be nearing a consolidation phase rather than an immediate reversal.