Chart of the week: Oil shock – is CAD the new haven? Latest technical analysis.

• Oil shock reshaping FX markets: The ongoing US–Iran war in 2026 has driven a surge in energy prices amid fears of disruption around the Strait of Hormuz, strengthening the US Dollar Index overall while triggering volatility across major currencies.
• Canadian dollar outperforming on oil rally: As a major energy exporter, Canada’s currency has benefited from the sharp rise in West Texas Intermediate crude oil, which surged more than 35% in a week and climbed above $100 per barrel, allowing the Canadian dollar to outperform most major currencies and even gain against the US dollar.
• USD/CAD nearing bearish technical breakdown: The USD/CAD is testing key support at 1.3550 within a descending channel; a break lower could expose the next supports at 1.3485–1.3370, while a move above 1.3753 would invalidate the bearish outlook.

Rising oil prices are now triggering a significant ripple effect in global financial markets due to the ongoing US-Iran war, which is showing no clear signs of de-escalation as the conflict has entered its 11th day, and in turn, increases the risk of a severe global oil and gas supply disruption due to the closure of the Strait of Hormuz.

The US dollar has strengthened against almost all major currencies since the start of the war on 28 February 2026. The US Dollar Index recorded a weekly gain of 1.2% for the week of 2 March 2026 to hit a three-month high of 99.68.

However, the Canadian dollar (CAD) did not weaken against the US dollar, as Canada is a major exporter of crude oil. Hence, the recent surge in oil prices has provided a “resilient shield” for the CAD against the firmer US dollar.

Based on a five-day rolling performance as of Friday, March 6, the Canadian dollar outperformed the US dollar and other major currencies, as the USD/USD shed 0.6% versus a gain of 1% seen on the US Dollar Index (Fig. 1).

The movement of the USD/CAD (inverse) has tracked the trend of WTI crude oil in direct lockstep since the major peak in May 2022 (see Fig. 2).

Last week, WTI crude oil recorded a weekly gain of 35.6% for the week of March 2, 2026, its best weekly performance since the week of July 30, 1979 (+38.7%). On Monday, 9 March 2026, WTI crude oil has extended its rally by 24% to trade at around $113 per barrel at the time of writing, breaching above $100 for the first time since August 2022.

Therefore, if WTI crude oil continues to rally, the CAD may see further appreciation against the US dollar

The price action of the USD/CAD has continued to trade within a medium-term descending channel since the 21 November 2025 swing high.

The USD/CAD broke below its 20-day moving average on Friday, 6 March 2026, and is now testing its intermediate support at 1.3550, the lower boundary of a three-month range configuration in place since the 30 January 2026 low (see Fig. 3).

Additionally, the 4-hour MACD trend indicator triggered a breakdown below its former key ascending support on Thursday, 5 March 2026, indicating a potential shift in trend towards a bearish condition.

Watch the 1.3725/1.3753 key medium-term pivotal resistance on the USD/CAD. A break below 1.3550 exposes the next medium-term supports at 1.3485, 1.3425, and 1.3370.

On the other hand, a clearance above 1.3753 invalidates the bearish scenario for the USD/CAD, potentially triggering a corrective rebound, with the next medium-term resistances located at 1.3795 and 1.3850.