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On Thursday, the USD/CAD pair received support from buyers and rose above the key 1.3700 level, driven by the overall strengthening of the US dollar.
Spot prices have corrected and now appear ready for further growth.US President Donald Trump denied media rumors about his alleged intention to remove Federal Reserve Chairman Jerome Powell, noting that such a move could destabilize markets. In addition, there is growing recognition that the Federal Reserve may postpone interest rate cuts, which supports the US dollar and, consequently, the USD/CAD pair.
The Canadian dollar remains under pressure due to ongoing trade uncertainty. Last week, Trump announced the introduction of a 35% tariff on imports from Canada starting August 1 and warned Prime Minister Mark Carney of potential further tariff increases in response to any Canadian countermeasures. Moreover, the introduction of a 50% tariff on US copper imports is further weakening the Canadian dollar and also supporting the USD/CAD pair's upward movement.
Oil prices remain near the two-week lows reached on Wednesday and are struggling to attract new buyers.
This has little impact on the Canadian dollar, which is closely tied to commodity markets, and does not hinder the rise of USD/CAD.
For better trading opportunities today, attention should be paid to the release of monthly retail sales data, weekly initial jobless claims, and the Philadelphia Fed manufacturing index. These reports are due during the North American session.
From a technical standpoint, the Relative Strength Index (RSI) has only just begun to gain positive momentum, building a case for further growth in the pair.
The nearest resistance for the pair lies at 1.3760; breaking above this level could open the way for a test of the June high.
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