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USD/CAD bear flag signals further downside amid oil price surge

USD/CAD is under pressure as rising oil prices strengthen the Canadian dollar and reinforce a broader downtrend in the pair. A bear flag breakdown suggests further downside could be possible if key technical levels continue to hold.

Michael J Kramer

Founder, Mott Capital Management

09 Mar 2026, 14:48

Oil price surge boosts Canadian dollar

With WTI crude oil prices surging above $100, one major beneficiary appears to be the Canadian dollar. The USD/CAD has strengthened significantly since the oil price surge, making it one of the few currencies to benefit. USD/CAD is now breaking below a support level around 1.355, which is also part of an uptrend forming a bear flag. That lower trend line has now been broken and suggests that USD/CAD could move lower. A 100% extension of the bear flag indicates that USD/CAD might fall to approximately 1.313.

Source: TradingView, 09 March 2026

Downtrend reinforced by key resistance

Additionally, USD/CAD has been trending lower since November 2025, reflecting a strengthening Canadian dollar, and that downtrend appears to remain firmly in place. There is also a very strong level of resistance around 1.374, which dates back to June 2025 when it served as support as part of a triple-bottom formation. The downtrend and this resistance level are reinforcing the Canadian dollar’s strength against the US dollar.

Bollinger Band support could trigger short-term rebound

However, USD/CAD is currently resting on its lower Bollinger Band, which may act as a potential level of support. If USD/CAD were to reverse and climb back towards the downtrend and resistance around 1.37, it could set up a challenge to that resistance zone. A breakout above that level would likely invalidate the bearish case for USD/CAD.

Source: TradingView, 09 March 2026

The EUR/USD may be close to breaking out

EUR/USD is trading above its 200-day moving average and approaching resistance near $1.1660, with a breakout potentially opening the way for further gains.

Server racks in a data centre. Photo by Brett Sayles via Pexels; free-to-use Pexels licence checked 18 August 2026.

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