The USDCAD moved lower in today's trading, driven by broad USD weakness. Late yesterday, the pair broke below the 100-hour moving average (blue line) and retested it during the early Asian session, using it as resistance before beginning a more decisive move to the downside. That rejection helped solidify bearish control.
The pair also dropped below the 38.2% retracement of the decline from the mid-May high, further weakening the technical picture. Selling pressure deepened as the price fell under the 200-hour moving average (green line) and a swing area near 1.3707 (green numbered circles), which had previously been a strong ceiling for price rallies. After a brief consolidation, momentum picked up again, extending the decline.
The pair is now testing a critical support zone between 1.3633 and 1.3650, a level that has acted as both resistance and support throughout June (see red numbered circles). A clear break below this area would likely lead to additional downside pressure, reinforcing a short-term bearish bias. If 1.3633 fails to hold, traders will likely begin to target the June low at 1.3539 as the next key support level.
Key levels:
Resistance: 1.3685 to 1.3693 (200-hour MA/swing area), 1.3721 (broken 38.2% retracement), 1.3777 (100-hour MA)
Support: 1.3633–1.3650 (current swing area being tested), 1.3600 (natural support), 1.3539 (low for the year.)
This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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