Wednesday marks the third straight day the USD/CAD pair has attracted buyers. Moreover, fundamental factors continue to support the sustained uptrend observed over the past two weeks.

The recent sharp drop in crude oil prices is weighing on the Canadian dollar. This, combined with optimistic sentiment toward the US dollar and positive US purchasing managers' index (PMI) readings, creates favorable conditions for the USD/CAD pair to rise.

Nevertheless, the oil price trend is becoming less negative for the Canadian dollar. On Wednesday, WTI (West Texas Intermediate) oil rose above $91, increasing by 0.80% at the time of publication after sharp declines in previous days. However, this recovery does not provide noticeable support to the Canadian dollar amid the strengthening US currency.

Oil prices rose amid ongoing assessments of diplomatic developments related to the conflict between the US and Iran. Earlier hopes for de-escalation pressured energy prices, especially after reports that Iran could open the Strait of Hormuz in exchange for reduced US military pressure. Saudi Arabia's persistent efforts to restore alternative export routes also help ease concerns about global oil supplies.

Regarding the economic situation in the US, the US dollar shows positive dynamics. The Federal Reserve raised interest rates for the first time in three years. It hinted at the possibility of another hike this year, maintaining a tightening monetary policy stance that benefits the US currency.

However, the recent decline in oil prices has helped ease concerns about a new wave of inflation in the US. This has kept US Treasury yields below recent multi-year highs, which could potentially limit the dollar's appeal and slow further USD/CAD gains.

As a result, the pair is under pressure from two conflicting factors: the US dollar, supported by the Fed's hawkish policy, and the Canadian dollar, which could benefit from an oil price recovery after the recent drop.

From a technical perspective, USD/CAD trades above key moving averages, maintaining a bullish bias. The nearest target for bulls is 1.4130. Breaking it could open the way to a steeper upward move.

Initial support below lies in the 1.4055–1.4025 range, forming a bullish base that limits the depth of potential corrective moves. Oscillators are positive, confirming the bulls' advantage in the market. But the Relative Strength Index is near the overbought zone, suggesting a potential correction.