Oil collapsed, the CAD is under pressure: what is happening with USDCAD

Against the backdrop of cheaper oil, the CAD continues to lose ground. The current quote is 1.3815. More details are in our analysis for 25 May 2026.

USDCAD forecast: key takeaways

• Falling oil prices are directly putting pressure on the CAD
• The USDCAD pair has found itself in a tug-of-war trap
• USDCAD forecast for 25 May 2026: 1.3860

Fundamental analysis

The forecast for the USDCAD price for today, 25 May 2026, shows that the pair is continuing its upward trend while testing April levels. On Monday morning, quotes are consolidating around 1.3815.

The weekend brought a signal of de-escalation in the Middle East conflict. On Sunday, US President Donald Trump (Donald John Trump) stated that Washington and Tehran had largely agreed a memorandum of understanding on a peace agreement that предусматривает opening the Strait of Hormuz.

Trump also made it clear that the naval blockade of Iranian ports will remain in force until an official, certified agreement is signed. This warning is preventing the dollar from falling more sharply and is creating support for USDCAD.

Falling oil prices are directly putting pressure on the CAD. Canada is the largest exporter of energy resources to the US. The fundamental correlation between the oil price and the Canadian dollar is direct: the higher oil is, the stronger the CAD. And vice versa, a fall in oil deprives the CAD of support.

The USDCAD pair has found itself in a tug-of-war trap. Hopes for a truce in the Strait of Hormuz are simultaneously weakening the dollar, which pulls the pair downwards, and collapsing oil, which deprives the CAD of support and pushes the pair upwards.

The final results of the negotiations between the US and Iran will become the trigger for further moves in the USDCAD rate.

Technical outlook

On the H4 chart, the USDCAD price formed a Hammer reversal pattern near the lower Bollinger Band. At this stage, it is continuing the upward wave as part of the signal from the pattern. Since quotes remain within the boundaries of an upward channel, growth towards the nearest resistance at 1.3860 can be expected. If this level is broken, the market will open the prospect of continuing the upward trend.

At the same time, the forecast for 25 May 2026 also contains a market scenario involving a correction in the USDCAD rate to 1.3785 before growth.

USDCAD overview

• Asset: USDCAD
• Timeframe: H4 (Intraday)
• Trend: upward
• Key resistance levels: 1.3860 and 1.3945
• Key support levels: 1.3785 and 1.3730

USDCAD trading scenarios for today

Main scenario (Buy Stop)

Consolidation of quotes above 1.3860 will confirm USD strength and the continuation of the upward trend, which will open the way to 1.3945.

• Take Profit: 1.3945
• Stop Loss: 1.3730

Alternative scenario (Sell Stop)

A breakout of support at 1.3785 will become a signal of stronger pressure on the USD and the formation of a downward wave. In this case, the fall in quotes may continue towards 1.3730.

• Take Profit: 1.3730
• Stop Loss: 1.3805

Risk factors

The factors influencing the USDCAD rate remain geopolitics and oil dynamics. Rising energy prices are supporting the CAD, but demand for the dollar as a safe haven and expectations of tighter Fed monetary policy are preserving the strength of the USD. If Brent continues to fall, this will weaken the CAD even further.

Summary

The CAD continues to remain dependent on geopolitical risks and the cost of oil. Technical analysis of USDCAD suggests growth in quotes towards the 1.3860 level after the correction.

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