During the Asian trading session on Thursday, the US dollar continued to decline against the Canadian dollar, with the exchange rate hovering around 1.3665, down approximately 0.20% for the day. Despite short-term weakness, market caution ahead of US-Iran nuclear talks limited the extent of the decline.

On the dollar front, policy uncertainty continues to suppress the greenback's performance. US President Donald Trump stated in his State of the Union address that the White House remains committed to its tariff policy framework. Following the US Supreme Court's rejection of some broad tariff measures, the administration has shifted to implementing a 150-day, 10% global provisional tariff, hinting at a potential future increase to 15%.

Policy fluctuations have heightened concerns about disruptions to global supply chains, diminishing the appeal of dollar-denominated assets. Additionally, overall optimism toward risk assets, coupled with rising global equity markets, has reduced safe-haven demand for the dollar. Capital is increasingly flowing toward riskier assets, putting periodic pressure on the US dollar index.

In the crude oil market, prices remain range-bound at low levels. A significant increase in US crude inventories has exerted short-term pressure on oil prices. However, lingering concerns over potential military conflict between the US and Iran, which could disrupt Middle Eastern supplies, have limited further declines.

Weakness in oil prices has deprived the commodity-linked Canadian dollar of significant upward momentum, thereby curbing the downside for USD/CAD.

From a technical perspective, USD/CAD is currently in a short-term pullback pattern from recent highs but has not yet broken the overall consolidation structure. The price remains within the recent trading range, indicating a relative balance between bullish and bearish forces in the near term. The RSI indicator hovers around 50, suggesting neutral market momentum.

Immediate support is seen at the 1.3600 psychological level, followed by the 1.3550 area. A break below this range could accelerate a test of support near 1.3480. Resistance above lies in the 1.3720 region. If the exchange rate reclaims this level, it may resume its upward trajectory and test highs near 1.3800.