USD/CAD Price Forecast: Hand holds 20-day EMA amid US-Iran war

The USD/CAD pair trades flat at around 1.3645 during the European trading session on Thursday. The Loonie pair consolidates as the recovery move in the US Dollar (USD) after a slight correction has offset the strength in the Canadian Dollar.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher to near 99.00.

The USD Index began correcting after posting a fresh three-month high of 99.67 on Tuesday, following a report from the New York Times (NYT) that signaled Iran’s willingness to talk about ending the conflict with the United States (US). However, Tehran denied the reports and threatened a prolonged war, which appears to have revived demand for safe-haven assets.

In addition to reviving risk-off bets, upbeat US ADP Employment and surprisingly strong ISM Services PMI data for February.

The ADP reported that the US private sector created 63K fresh jobs in February, significantly higher than 50K estimates and the prior reading of 11K. Meanwhile, the ISM report showed that the Services PMI arrived higher at 56.1, while it was expected to come in lower at 53.5 from 53.8 in January.

Though the Canadian Dollar (CAD) trades flat against the US Dollar amid Middle East conflicts, the former trades firmly against other peers amid higher oil prices. Given that Canada is the largest exporter of oil to the US, higher oil prices are a favorable situation for the Canadian Dollar.

USD/CAD technical analysis

USD/CAD trades flat at around 1.3645 at the press time. The near-term bias is neutral as spot holds close to the 20-day Exponential Moving Average (EMA) at around 1.3665.

The 14-day Relative Strength Index (RSI) in the 40.00-60.00 range stays below the 50 line, indicating soft bullish conviction and aligning with a corrective-to-lower tone rather than a sustained advance.

Initial support emerges at the February 18 low of 1.3632, guarding the recent 1.3558–1.3559 area that underpins the February base and defines the lower edge of the current range. A break below this band would expose the 1.3490 low and signal that sellers are regaining control. On the topside, immediate resistance is at the March 2 high of 1.3720, where a daily close above would be needed to shift the bias back toward the upside and open the way toward the mid-1.37s.

(The technical analysis of this story was written with the help of an AI tool.)