USD/CAD Price Forecast: Gains ground above 1.3600, while bearish technical bias persists

The USD/CAD pair posts modest gains near 1.3635 during the early European trading hours on Tuesday. Uncertainty over US-Iran peace talks and the closure of the Strait of Hormuz provide some support to a safe-haven currency such as the US Dollar (USD) against the Canadian Dollar (CAD). 

US President Donald Trump and his national security team discussed an Iranian peace plan to halt the war and open the Strait of Hormuz while postponing talks on its nuclear program. Nonetheless, White House press secretary Karoline Leavitt told reporters that it remains unclear if Trump will entertain the offer to end the two-month-old war as his bottom-line demands remain the same.

All eyes will be on the US Federal Reserve (Fed) interest rate decision later on Wednesday. The US central bank is widely expected to keep interest rates unchanged at its 3.50%–3.75% target range at its April policy meeting on Wednesday. 

Technical Analysis:

In the daily chart, USD/CAD keeps a bearish near-term tone as spot holds below the 100-day Exponential Moving Average (EMA) and the Bollinger Bands’ 20-day Simple Moving Average (SMA). The pair is sliding within the lower half of the Bollinger envelope, while the Relative Strength Index (RSI) at about 36 stays below the neutral 50 line, hinting at persistent downside pressure rather than a confirmed oversold washout.

On the topside, initial resistance emerges at the 100-day EMA around 1.3760, closely followed by the Bollinger 20-day SMA near 1.3767, where a recovery rally would likely face selling interest, with the upper Bollinger band far above near 1.3974 marking a more distant cap. On the downside, the lower Bollinger band at roughly 1.3560 offers the next notable support, and a clear break beneath this floor would open the door to an extension of the current decline.

(The technical analysis of this story was written with the help of an AI tool.)