USD/CAD rises as Iran tensions boost oil, supporting Canadian dollar outlook

Oil prices have edged higher today with WTI crude climbing from $59.00 on January 22 to $65.73, a gain of over 11%, as geopolitical tensions with Iran intensify. President Trump has reiterated that a naval 'armada' is heading toward Iran, larger than the fleet sent to Venezuela, heightening market concerns about potential supply disruptions. The sustained rally in oil prices is providing underlying support for the Canadian dollar, though immediate USD/CAD movement remains muted. Energy sector strength typically bolsters CAD as Canada is a major oil exporter, with every $10 move in oil historically correlating to roughly 2-3% CAD appreciation. Technical resistance for WTI sits at $67.50, while support has formed at $64.00. Traders should monitor weekend developments closely as any escalation could trigger gap openings in both oil and CAD pairs, with USD/CAD likely to test 1.3400 support if tensions escalate further.