The Canadian Dollar (CAD) is staying around 1.38 after a small dip last night due to the strong US Dollar (USD). This movement in currency is part of the overall trend of the USD. The Bloomberg Commodity Index has reached a three-year high. However, rising commodity prices are not helping Canada’s trade situation as much as before because energy prices are lagging. Comments from President Trump about Venezuela’s oil supply are also putting pressure on energy prices.

USDCAD Resistance and Support Levels

The USD/CAD closed at around 1.3805, showing the USD has bounced back from earlier lows. Resistance is seen in the low 1.38 range, and if that is surpassed, it could rise to 1.3880. Support levels for the USD are around 1.3780/85 and 1.3750. These changes in the exchange rate are influenced by global economic policies and market reactions. At the end of 2025, the Canadian dollar was stable at about 1.38 against the USD. Back then, it was noticeable that while general commodity prices were rising, energy prices were not keeping up, preventing any major gains for the CAD. The Canadian dollar largely followed the trends of the US dollar. Now, in the first week of January 2026, this trend is changing. A cold snap across North America is pushing WTI crude prices back up to $85 per barrel. Additionally, last week’s Canadian jobs report showed an increase of 45,000 jobs, unlike the weaker US non-farm payrolls data. These developments are giving a boost to the Canadian dollar that it lacked last month.

Derivative Traders Outlook

For derivative traders, it seems that USD/CAD will likely stay in the low 1.38 range in the coming weeks. There is growing interest in buying CAD calls or USD puts, with strike prices expecting a move back towards the 1.3750 support level noted in December 2025. The improved outlook for energy gives a solid reason to believe the pair might drop from its current level. However, we should be careful, as this outlook heavily depends on central bank decisions. The upcoming FOMC meeting in late January is a significant risk, as any unexpectedly aggressive comments from the Federal Reserve could reverse the current trend. If the Fed shows concern about inflation, it could strengthen the USD and push the pair past the 1.3820 resistance level. Create your live VT Markets account and start trading now.

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