USDCAD Technical Analysis: Range-Bound Movement

Overview

The USDCAD currency pair has been trading within a defined range since January 26, fluctuating between 1.3522 and 1.3724. Recent market activity has seen the pair testing these boundaries, with notable movements in both directions.

Recent Price Action

Last week, sellers pushed the USDCAD down to the lower boundary of its range. However, a shift in momentum occurred late in the week, allowing the price to break above the upper limit of the range. This breakout was short-lived, leading to a pullback that corrected 38.2% of the upward movement, finding support around 1.3658.

Despite the pullback, sellers were unable to maintain momentum below the 1.3658 level, which prompted a rebound towards the resistance zone between 1.37149 and 1.3724. However, buying interest waned just below 1.3709, reinforcing the resistance level.

Technical Analysis

Support and Resistance Levels

• Downside: A move below 1.3658 (38.2% retracement) and the rising 100-hour moving average at 1.3654 would indicate increased bearish momentum. A break below this zone could lead to further declines towards the next support area between 1.3624 and 1.3630, where the rising 200-hour moving average is also positioned.
• Upside: For buyers to gain control, a break and sustained hold above 1.3724 is necessary to escape the broader range.

Market Bias Assessment

The current market bias is assessed as follows:

• Bullish: Above 1.3658, where buyers have recently defended support.
• Bearish: On failure near 1.3724, where sellers continue to cap rallies.

Overall, while the USDCAD is closer to the top of its multi-month range, indicating a slight edge for buyers, the inability to decisively break through resistance keeps the price action within a range-bound scenario.