USD/CAD Price Forecast: Bulls have the upper hand, move back above 1.4100 awaited

USD/CAD regains some positive traction and draws support from a combination of factors.

Crude Oil prices remain depressed and undermine the Loonie amid Trump’s tariff threats.

The technical setup favors bulls and supports prospects for additional near-term gains.

The USD/CAD pair attracts some dip-buyers following the previous day's pullback from the highest level since April 2020 and trades around the 1.4070 region during the Asian session on Wednesday. Meanwhile, the fundamental backdrop favors bullish traders and suggests that the path of least resistance for spot prices is to the upside. 

The long-running Middle East conflict de-escalated after US President Joe Biden announced that Lebanon and Israel agreed to a ceasefire deal. This, in turn, fails to assist Crude Oil prices to capitalize on Tuesday's modest bounce from over a one-week low. This, along with US President-elect Donald Trump's tariff threats, continues to undermine the commodity-linked Loonie. Adding to this, expectations for a less dovish Federal Reserve (Fed) might continue to act as a tailwind for the US Dollar (USD) and validate the positive outlook for the USD/CAD pair. 

From a technical perspective, this week's bounce from the 1.3930-1.3925 horizontal support and positive oscillators on the daily support prospects for a further near-term appreciating move for the USD/CAD pair. That said, it will still be prudent to wait for a sustained strength back above the 1.4100 mark before placing fresh bullish bets. Spot prices might then aim to challenge the multi-year peak and reclaim the 1.4200 round figure. The momentum could eventually lift spot prices to the 1.4265 intermediate hurdle en route to the April 2020 high, around the 1.4300 mark.