Last Updated on October 6, 2026 by Deon
The Canadian Dollar is still struggling against the US Dollar. The USD/CAD pair is near an 18-month high. Falling oil prices are having an effect on the Canadian Dollar. This currency is connected to commodities. The pair has gone up for three days in a row. It went up to about 1.4270 during trading in Europe on Tuesday.
The Canadian Dollar is being pushed down from sides. Lower oil prices are making it harder for this currency that is linked to resources. Also recent weak numbers from the economy have made people worry about how the country is doing. At the time the US Dollar is still strong. This is even though people expect less of a rate increase from the Federal Reserve in October.
Oil Prices Are Making the Canadian Dollar Weaker
Oil prices have an effect on the Canadian Dollar. This is because Canada exports a lot of energy. When oil prices go down the income from exports can get weaker. This puts pressure on the Canadian Dollar.
New things happening in the Middle East have made some people feel better about the supply of oil. A company called JPMorgan says that oil exports from the region are back to about 17.5 million barrels a day. This is to 98% of the level before the conflict. They also say that the flow of products has come back. Kuwait has started producing around 75% of what it used to.
These things have made oil prices go down. Oil also dropped than 2% on Tuesday. This happened because more oil is coming from the Middle East. Also there is a plan to release some oil from the G7 countries. This made people less worried about running out of oil.
For the Canadian Dollar weak oil prices could keep being a challenge.
USD/CAD Stays Near an 18-Month High
The USD/CAD pair is still close to 1.4293. This is a 18-month high. The pair has been going up in a time. Buyers are helping the US Dollar against the Canadian Dollar.
This recent movement also shows that the US Dollar is strong.. The US Dollars gains could be limited. This is because people are expecting things from the Federal Reserve.
Some recent numbers about jobs in the US have made people expect less of a rate increase. Markets are now expecting than 78% chance that the Fed will not change rates at their next meeting.
This is a situation for USD/CAD. Lower oil prices are making the Canadian Dollar weak.. Fewer expectations of a rate increase could stop the US Dollar from going up.
US Interest Rates are Still Important
The Federal Reserves decisions have a big effect on the US Dollar side of the USD/CAD pair.
New job numbers have made people expect a rate increase less. This makes traders not want to buy the US Dollar much. Lower oil prices are also making people worry less about inflation. This could give the Fed time to decide whether to raise rates.
The US Dollar is still getting support from other things. This includes US interest rates and people wanting safer investments.
If the US economy shows that inflation is still a problem or that growth is strong people might start expecting rate increases. This could help the US Dollar more.
Canadian Economy is Adding Pressure
The Canadian economy is another reason for the Canadian Dollar to be weak. Recent numbers from Canada have made people worry about how the economy’s doing. The services sector in Canada has been getting smaller for four months straight. The Canadian Dollar has also hit an 18-month low. This happened because the US Dollar was strong and the Canadian economy was weak.
If the economy is not doing well people might not expect the Bank of Canada to raise interest rates. If traders think that Canadian rates will stay low the difference between US rates could be worse for the Canadian Dollar.
This could keep the Dollar weak especially if oil prices stay low.
USD/CAD Technical View
The technical view for USD/CAD is still positive. The pair is at around 1.4270. It is still above both its nine-period and 50-period exponential moving averages. This shows that buyers are still in control of the short-term trend.
The 14-day RSI is near 79. This means the pair is in territory. This suggests that the rise has gone far and could be due for a short-term drop.
If the pair goes up to 1.4794 that would be a level for the medium term. A move past that would make the bullish trend even stronger.
If the pair goes down the first support is around 1.4202. This is the nine-period EMA. Stronger support is near 1.4022, which’s the 50-period EMA.
What Traders Should Watch
Traders who deal with USD/CAD will be looking at important things. They will watch oil prices. They will also look at what the Federal Reserve’s expected to do. They will follow Bank of Canada policy. They will check economic data. They will also look at US job numbers and inflation. Middle East oil supply will be important.. They will watch the support and resistance levels for USD/CAD.
Oil prices will be especially important for the Canadian Dollar. If oil prices go down the Canadian Dollar could get pressure. If oil prices go up that could help.
Canadian Dollar Outlook
The Canadian Dollar is still in a spot. Lower oil prices and worries about the economy are making things tough. USD/CAD is near an 18-month high.. The pairs gains could be limited if people keep expecting less of a rate increase from the Federal Reserve.
For now the trend is still in favor of the US Dollar.. The high RSI suggests that traders should watch for a possible drop.
If the pair goes above the high the positive outlook could get stronger. If the pair falls below 1.4202 that could mean the trend is starting to slow down. For the Canadian Dollar to get better traders might need to see oil prices, better economic data, from Canada and a weaker US Dollar.
