USD/CAD rose for a third day and hit a four-day high near 1.3630 in early European trading. The move followed a rebound from 1.3500 and came as the US dollar edged higher.
The US dollar stayed slightly stronger after Wednesday’s Nonfarm Payrolls report lowered expectations for a Federal Reserve rate cut in March. Lower crude oil prices also weighed on the Canadian dollar, lifting USD/CAD ahead of US consumer inflation data.
Technical Levels And Momentum
The 100-hour simple moving average is falling at 1.3576, but the price is still above it. The RSI is 68, which is close to overbought. Resistance is at 1.3641, the 61.8% Fibonacci retracement of last week’s drop.
The next resistance level is 1.3678, the 78.6% Fibonacci retracement. The MACD is near the zero line with a flat histogram. A break higher could target 1.3700, while a move below 1.3576 would weaken the bullish bias.
The technical analysis was produced with help from an AI tool.
USD/CAD is extending its rebound from the 1.3500 area and is trading in the mid-1.3600s this Friday. The move reflects a stronger US dollar and a weaker Canadian dollar. The main drivers are different economic outlooks and falling oil prices.
Options Strategy Into CPI
The US dollar strengthened after the January 2026 Nonfarm Payrolls report showed job gains of 215,000, well above expectations. This reduced hopes for a Federal Reserve rate cut in March. At the same time, WTI crude oil slipped below $70 a barrel on concerns about slower global demand, which tends to hurt the oil-linked Canadian dollar. This pattern also appeared in the second half of 2025, when strong US data pushed back rate-cut expectations and supported the US dollar.
This backdrop creates a potential opportunity ahead of the US Consumer Price Index (CPI) report. If inflation comes in above expectations, it could reinforce a more hawkish Fed stance and push USD/CAD above first resistance at 1.3641. Traders may consider near-term call options with a strike near 1.3650, aiming for a move toward 1.3700.
The technical picture supports this bullish view, with price holding above the 100-hour moving average near 1.3576. This level is an important area to watch for risk management on long positions. A break below it would suggest the near-term upward momentum is fading and could point to a more neutral outlook.
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