Today, the pair is likely to extend a second day of sideways consolidation, holding above the round 1.3600 level. A mixed fundamental backdrop warrants caution before taking positions that assume a continuation of the corrective rally from the psychological 1.3500 level established last week.

A modestly stronger US dollar at the start of the week is the main supportive factor for USD/CAD. However, market pricing for at least two Fed rate cuts in 2026—reinforced by softer-than-expected US consumer price data published on Friday—constrains aggressive dollar buying. The Canadian dollar receives additional support from the Bank of Canada's neutral stance, which helps limit further upside in the pair. The Bank of Canada has said that heightened economic and geopolitical uncertainty justified leaving the policy rate unchanged in January for a second consecutive meeting. The bank also noted a wider range of possible scenarios for 2026, from easing inflation and lower rates to unchanged or even tighter policy.

As a commodity currency, the Canadian dollar also benefits from stable oil prices. That dynamic caps the upside for USD/CAD and suggests that intraday advances are likely to be met with selling pressure.

Do not rush to increase positions today; it is preferable to wait for this week's key releases — Canada's consumer price data on Tuesday and the FOMC minutes on Wednesday. Market participants should also monitor speeches by influential FOMC officials, which can revise expectations for the US policy rate path and, in turn, alter dollar demand. A further source of volatility will be the second round of Iran-US nuclear talks. Developments there could move oil prices materially and, consequently, affect the USD/CAD exchange rate.

From a technical perspective, bulls will gain a real chance to seize control only if the price clears the 20-day simple moving average near 1.3650. For now, daily chart oscillators are negative, and the path of least resistance for the pair remains downward.