USD/CAD Price Forecast: Bulls Hold Near July 29 High, Eyeing 1.4100

USD/CAD extended its weekly gains on Wednesday, hitting a fresh high since July 29 during the session, with bulls building momentum below the 1.4100 round figure. As of writing, the pair traded at 1.40875, with short-term momentum favoring buyers.

**Pair Approaches Key Resistance, Technicals Remain Bullish**

Since the start of this week, USD/CAD has been supported by a favorable fundamental backdrop, marking a third consecutive day of gains. After breaking above the recent consolidation range, bulls successfully defended positions near the July 29 high and are targeting the 1.4100 psychological level. Market signals suggest that a decisive break above this resistance could trigger a new wave of technical buying, opening room for further upside.

**Fundamentals Provide Support, Oil Prices and Central Bank Policy Divergence in Focus**

The dollar's strength against the Canadian dollar partly stems from differences in the policy outlooks of the two central banks and volatility in energy prices. According to analysts at LiteFinance, the future price trajectory of USD/CAD will be primarily influenced by the policy paths of the U.S. and Canadian central banks, energy prices, and overall economic conditions. Recent declines in oil prices have weighed on the commodity-linked Canadian dollar, while market expectations regarding the Federal Reserve's policy pace relative to other central banks have provided a comparative advantage for the dollar.

**Institutional Forecasts Show Divergence in Long-Term Path**

Looking ahead, forecasting models from LongForecast suggest that USD/CAD may experience a path of initial decline followed by recovery over the remainder of the year. The institution projects that the pair could retreat in the third quarter but may rebound toward the 1.4300 level by year-end. However, some market analysts note that if momentum indicators such as the Relative Strength Index show bearish divergence signals, the pair could still face pullback pressure after hitting key resistance, and investors should be wary of short-term volatility risks.