USD/CAD rises as oil retreats from 200-DMA amid Middle East tensions

USD/CAD has gained 0.15% to 1.3625 as oil prices pulled back from overnight highs near $68.45, coinciding with WTI crude's 200-day moving average. The commodity initially surged to its highest level since April following reports of escalating Middle East tensions, with the US evacuating personnel and Israel reportedly preparing for operations against Iran. However, technical resistance at the 200-DMA has tempered the oil rally, providing relief for the Canadian dollar's recent pressure. The geopolitical risk premium remains elevated, with traders closely monitoring developments that could impact global energy markets. For USD/CAD, immediate support lies at 1.3580 while resistance is seen at 1.3650. A sustained break above oil's 200-DMA could reverse the pair's gains, as higher energy prices typically strengthen the commodity-linked Canadian dollar. Traders should remain cautious as headline risks from the Middle East situation continue to drive volatility.