Published: 13 March 2026,07:30
Daily Market Analysis New
*USD/CAD tests 1.3550 support as the Canadian Dollar (the “Loonie”) benefits from its status as a premier global oil exporter during the Middle East blockade.
*Canada as a “Safe Haven” Supplier: With the Strait of Hormuz effectively closed, global buyers are pivoting to Canadian heavy crude, further supporting the CAD.
*U.S. Dollar Resilience: Strong demand for Greenback liquidity and spiking Treasury yields have capped the Loonie’s gains, keeping the USD/CAD in a volatile tug-of-war.
*Inflation Data in Focus: Today’s U.S. Core PCE Price Index (expected at 3.1% YoY) will be the primary catalyst for the next major leg in the pair.
Market Summary:
For traders finding the $20-$40 daily swings in Crude Oil too risky, the USD/CAD offers a more “buffered” way to trade the energy crisis. As a major net exporter of oil, Canada’s economy is positively correlated with energy prices. When oil spikes due to geopolitical conflict—such as the current Iranian blockade—the Canadian Dollar typically appreciates. This week, we have seen the USD/CAD experience a steady sell-off, dropping from the 1.3700 level toward 1.3550 as the “oil-windfall” for Alberta’s energy sector begins to be priced in.
However, the “Loonie’s” rally is facing a massive obstacle: U.S. Dollar strength. The Greenback is currently behaving as the ultimate safe-haven asset. Furthermore, because oil is priced in dollars, global buyers must first buy USD to settle their energy contracts, creating a “natural floor” for the currency. This has prevented the USD/CAD from crashing lower, even as oil touched $119/bbl earlier in the week.
The Inflation Trigger:
The next 24 hours are critical. Wall Street is bracing for the U.S. Core PCE Price Index report. Institutional investors are currently selling off U.S. bonds, pushing Treasury yields higher (now at 4.16% for the 10-year), on the bet that the Federal Reserve will have to keep interest rates “higher-for-longer” to fight war-driven inflation. If the PCE data comes in “hotter” than the 3.1% forecast, the U.S. Dollar could surge, potentially erasing the Canadian Dollar’s oil-driven gains and pushing USD/CAD back toward the 1.3750 resistance.
The Bottom Line:
The USD/CAD is the ideal pair for a “wait-and-see” approach to the Middle East war.
Traders should watch the 1.3550 support level closely. A decisive break below this would suggest the market is fully committed to the “Canadian Oil Boom” narrative.
Technical Analysis
USD/CAD is exhibiting bullish strength as it tests the 1.3635 resistance level. The technical outlook is constructive, with the MACD showing increasing upward momentum and the RSI at 58 holding steady above the midline, signaling room for further gains.
A confirmed breakout above 1.3635 would likely propel the pair toward the next target at 1.3710. However, if the resistance holds, expect a retracement to the 1.3545 support level as the market seeks a more stable floor.
Resistance Levels: 1.3635, 1.3710
Support Levels: 1.3545, 1.3425
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