USD/CAD rises on US-China trade truce extension optimism

USD/CAD has gained 0.4% to 1.3875 as the US Dollar strengthens on reports of a potential 90-day extension to the US-China trade truce. The positive trade developments have boosted risk sentiment and supported the greenback against the Canadian dollar, despite oil prices remaining steady near $78/barrel. Market participants are interpreting the trade extension as a sign of improving bilateral relations, reducing immediate tariff concerns that had weighed on global growth prospects. The pair has broken above its 50-day moving average at 1.3850, with technical momentum turning bullish. Immediate resistance lies at 1.3900, while support has formed at 1.3830. The Canadian dollar faces additional pressure from expectations of diverging monetary policy, with the Bank of Canada likely to maintain its dovish stance while the Fed delays anticipated rate cuts. A sustained move above 1.3900 could target the psychological 1.4000 level.