The US Dollar (USD) has appreciated for the fourth consecutive day against the Canadian Dollar (CAD), with the USD/CAD pair reaching weekly highs at 1.4080 on Wednesday. This movement is largely attributed to a decline in crude oil prices, which are trading at three-week lows below $80 per barrel, following hopes for a diplomatic resolution to the US-Iran conflict. The drop in oil prices, a key export for Canada, has offset the positive impact of Canada's Merchandise Trade Surplus, which hit a four-year high in June [1].
In the US, recent macroeconomic data has tempered expectations for further Federal Reserve rate hikes. JOLTS Job Openings showed a larger-than-expected decline in June, and Factory Orders contracted, leading to a decrease in the probability of a Fed rate hike in September to 58%, down from 67% the previous day, according to CME Group's FedWatch Tool [1]. Technical analysis indicates USD/CAD is trading at 1.4072, with momentum indicators such as the 4-hour RSI above 58 and MACD in positive territory, suggesting a steady but moderate bullish tone. Resistance is noted at 1.4090, with potential upside targets at 1.4125 and 1.4250, while support levels are at 1.4000, 1.3920, and 1.3865 [1].
Meanwhile, the AUD/USD pair is steady around 0.7050 after gaining over 0.5% the previous day. Technical analysis shows the pair remains within an ascending channel, maintaining a bullish bias as it trades above both the nine-period and 50-period EMAs. The 14-day RSI is around 59, indicating firm momentum, and the FXSFedSentiment Index is elevated at 145.80, suggesting continued volatility from policy-related headlines [2]. UOB Group strategists note that the AUD has rebounded strongly, closing at 0.7047 (+0.67%), and could continue to rise, though resistance is expected at 0.7075 and 0.7060. To sustain momentum, AUD must not break below 0.7020, with minor support at 0.7030 [2].
Both articles highlight currency heat maps, showing the Canadian Dollar was strongest against the New Zealand Dollar, while the Australian Dollar was also strongest against the New Zealand Dollar. The USD weakened slightly against both CAD and AUD, with percentage changes of -0.04% and -0.05% respectively [1][2].
CONCLUSION
The USD/CAD pair is benefiting from weaker oil prices and subdued Fed rate hike expectations, while AUD/USD maintains a bullish bias amid technical support and positive momentum. Market sentiment is moderately positive for both USD and AUD, with medium impact expected as traders watch for further developments in oil prices and central bank policy signals.