USD/CAD consolidates near 6-month peak as oil prices stabilize

USD/CAD is trading at 1.3820, holding just below its six-month high of 1.3850 reached earlier this week. The pair has gained 2.1% over the past month, driven by diverging monetary policies between the Federal Reserve and Bank of Canada. Oil prices stabilizing near $85 per barrel have provided temporary support for the Canadian dollar, preventing further USD/CAD advances. Canada's latest inflation data showed CPI cooling to 2.1% annually, giving the BoC room for potential rate cuts, while the Fed maintains its hawkish bias. Technical analysis reveals strong resistance at 1.3850, with a break above targeting 1.3900. Support is established at 1.3780, aligning with the 50-day moving average. Traders are closely monitoring next week's Canadian retail sales data and OPEC+ meeting outcomes, which could determine whether USD/CAD breaks its current range.