USDCAD Technical Outlook: Support Holds, Eyes Shift to 1.3685–1.3692 Resistance Zone

The USDCAD pair stabilized after an early session decline, finding robust support at its 200-hour moving average near 1.3632. This support area, reinforced by the low of the recent swing around 1.3630, helped halt the downward pressure and sparked renewed buying interest.

Buyers capitalized on this technical floor, shifting short-term momentum back to the upside. The pair’s ability to stay above this zone has been key to maintaining a bullish bias in the near term.

A sustained hold above these levels keeps buyers in control, though any move below could quickly reintroduce downside risks and test lower supports.

Resistance at 1.3685-1.3692 Remains a Critical Hurdle

The next major challenge for USDCAD bulls is the resistance zone between 1.3685 and 1.3692. This area has repeatedly acted as a significant inflection point in recent weeks, serving as both resistance and support during volatile sessions.

A break above this zone would mark a shift toward a more convincingly bullish outlook, potentially opening the path for further gains. Until then, the resistance remains a formidable barrier that buyers need to overcome.

Repeated failures to clear this area could invite renewed selling pressure and keep the pair confined to its current range.

Did you know?
The USDCAD pair is often called the “Loonie,” a nickname derived from the Canadian one-dollar coin, which features a common loon. The pair is heavily influenced by oil prices, as Canada is a major oil exporter.

Retracement Levels Offer Additional Guidance

Technical retracement levels are providing additional context for traders. The pair has reclaimed the 38.2% retracement of the decline from the June high, now acting as a support reference. The 50% retracement near 1.3676 is the next technical target, closely aligned with the lower end of the resistance zone.

Traders are watching these levels closely, as a decisive move above the 50% retracement could reinforce the bullish scenario. Conversely, a failure to hold above the 38.2% retracement would undermine the recovery and shift focus back to lower support areas.

These Fibonacci levels are guiding short-term trading strategies as the market awaits a breakout.

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Downside Risks Persist if Support Fails

Despite the current bullish momentum, downside risks remain if USDCAD fails to hold above its key support levels. A move back below the 200-hour moving average and the 38.2% retracement would negate the recent bounce, exposing the pair to further declines.

Immediate support lies at 1.3616, marked by the 100-hour moving average, followed by additional levels at 1.3591 and 1.3579. A break of these supports could accelerate selling and shift the broader outlook back to bearish.

Traders are advised to monitor these levels closely, as a loss of support could quickly change the technical landscape.

Bulls Maintain Control but Must Prove Strength Above Resistance

For now, USDCAD bulls are in the driver’s seat, but they face a crucial test at the 1.3685-1.3692 resistance zone. A clear break above this area would confirm the shift to a stronger bullish bias and encourage further buying interest.

Until that happens, the pair remains at a technical crossroads, with both upside and downside scenarios in play. The coming sessions will be pivotal in determining the next major trend for USDCAD.