USD/CAD Falls as Canadian Dollar Hits 2-Month High Below 1.3500

USD/CAD has declined 0.7% to 1.3480, marking the Canadian dollar's strongest level in two months as oil prices surge and BoC rate cut expectations moderate. WTI crude oil's rally above $71 per barrel provides significant support for the commodity-linked loonie, while recent Canadian inflation data at 2.5% suggests the Bank of Canada may pause its easing cycle. The pair broke below the psychologically important 1.3500 level and the 200-day moving average at 1.3510, signaling bearish momentum. Technical indicators point to further downside with immediate support at 1.3450, followed by 1.3400. Resistance now stands at 1.3520-1.3540 zone. The Canadian dollar's strength could accelerate if oil prices maintain upward trajectory and upcoming Canadian employment data surprises to the upside. Traders should monitor crude oil movements and relative central bank policies for directional cues.