USD/CAD Drops to 3-Week Lows Below 1.3700 on Dollar Weakness

USD/CAD has extended its pullback to fresh three-week lows, breaking below the key 1.3700 handle as the US dollar faces sustained selling pressure against the Canadian dollar. The move represents a continuation of the bearish trend that has developed over recent sessions, with the pair shedding significant ground from its earlier monthly highs. The Canadian dollar's strength is being supported by a combination of resilient oil prices and improved risk appetite amid optimistic geopolitical developments. Technical indicators suggest the pair may test further downside, with the break below 1.3700 opening the door toward the next support zone near 1.3650. Resistance has shifted lower to the 1.3720-1.3740 area, which previously acted as support. The broader macro backdrop, including divergent monetary policy expectations between the Federal Reserve and the Bank of Canada, continues to influence medium-term positioning. Traders should watch upcoming Canadian employment data and crude oil price action for additional directional cues on this pair.