USDCAD has bounced back after a volatile phase, moving towards important resistance as buyers step in. The price is distancing itself from the 38.2% retracement level and the 100-hour moving average. In the last trading session, USDCAD experienced significant fluctuations. It initially fell below the 100-hour moving average, breaching a critical swing area. The decline halted just above the 200-hour moving average, around 1.3676, prompting buyers to return. This led to a retest of the 100-hour moving average and reduced earlier selling pressure.

Current Trading Session

In the current trading session, USDCAD has stabilized near the 100-hour moving average and the 38.2% retracement level from the May–June decline. The pair is gaining upward momentum, leaving the technical congestion zone and targeting the 50% retracement level near 1.3781. For buyers, it’s crucial to remain above the support zone of 1.3722–1.3727. If the price drops below this level, the market outlook could become neutral, turning attention to lower support levels around 1.3692–1.3685. The current key levels are support at 1.3722–1.3727 and resistance at 1.3781, with additional targets at 1.3814 and 1.3860. Looking at recent changes, the bounce from the lows near the 200-hour moving average seems to have built some short-term confidence. The following upward movement indicates that the dip through initial supports was likely a temporary setback rather than a trend reversal. With the price clearing out prior congestion around the 100-hour level and surpassing the 38.2% retracement, the route to higher resistance seems clearer, although interruptions could still occur.

Technical Analysis Insights

We see the retreat from recent lows not just as a technical correction but as a spot where buyers were eager to step in. This marked the moment when the initial downward momentum halted and began to reverse. The defense near 1.3676, slightly above the 200-hour average, is significant—it indicates a boundary, beyond which further declines faced strong demand. The retracement levels help identify immediate targets. As price nears the halfway point of the earlier decline and approaches the 1.3781 level, a strong resistance band forms. A consistent hold above this area could lead to gradual advances toward 1.3814. If strength continues, we may soon see the 1.3860 level as a target. On the other hand, if upward movement stalls and the price falls below the immediate support area of 1.3722–1.3727, enthusiasm for further gains will diminish quickly. This zone acts not only as support but also as a turning point where sentiment could shift in the opposite direction. Below this, traders would likely look at the next lower levels—1.3692–1.3685—for short-term positioning. With price maintaining above both the 100-hour average and the Fibonacci midpoint, the near-term outlook leans bullish. However, this depends on buyers’ ability to support rising zones. We view these levels as a guideline rather than precise predictions, but recent buying during declines highlights important areas for traders’ strategies. Given the strength of this move and reactions from both sides, traders should focus on the critical levels discussed. Attention should remain on price behavior at known supports and resistance levels, with the nearby 50% retracement serving as a practical reference for immediate strategies. Create your live VT Markets account and start trading now.

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