USD/CAD Price Forecast: Consolidates near 1.4250 as rising oil prices counter bullish USD

The USD/CAD pair attracts some sellers during the first half of the European session on Thursday, though it lacks follow-through and currently trades around mid-1.4200s, nearly unchanged for the day. Moreover, spot prices remain within striking distance of the highest level since April 2025, touched earlier this week, amid a bullish US Dollar (USD).

The US Federal Reserve's (Fed) hawkish stance, along with elevated US bond yields and geopolitical uncertainties, helps the safe-haven USD to stand firm near an 18-month high. However, the risk of a further escalation of tensions in the Middle East provides a goodish lift to crude oil prices, underpinning the commodity-linked Loonie and acting as a headwind for the USD/CAD pair.

From a technical perspective, the recent range-bound price action witnessed over the past week or so could still be categorized as a bullish consolidation phase against the backdrop of a strong rally from the September monthly swing low. Meanwhile, the Relative Strength Index (RSI) at 52.7 hints at neutral momentum rather than overbought conditions. Furthermore, the Moving Average Convergence Divergence (MACD) indicator stays marginally below zero, suggesting that bullish pressure is moderating rather than reversing decisively.

Hence, any corrective pullback could find decent support near last Friday's low, around the 1.4200 round figure, which, if broken, might prompt some technical selling and drag the USD/CAD pair to the 1.4150-1.4145 region. On the top side, bulls might now await a move beyond the year-to-date high, around the 1.4300 neighborhood, touched on Monday, before positioning for an extension of a well-established short-term uptrend.

USD/CAD 4-hour chart