USDCAD is currently showing indecision, trading between important moving averages as it stays within a certain range. Traders are waiting for a clear breakout. On the 4-hour chart, the price is fluctuating between crucial moving average levels. On Tuesday, the price reached a high of 1.37954 at the 100-day moving average, where sellers created resistance. Today, it briefly dipped below the 100-bar moving average at 1.37305, but buyers quickly stepped in to prevent further drops. The price range from 1.3749 to 1.3758 has been attracting buying and selling interest consistently.

Key Technical Levels

The key technical levels are support at the 100-bar moving average on the 4-hour chart at 1.37305 and resistance at the 100-day moving average at 1.37954. The important swing zone is between 1.3749 and 1.3758. USDCAD is stuck between these moving averages, indicating a tussle between buyers and sellers. A shift in momentum isn’t likely until there’s a breakout above or below the 100-day or 100-bar moving averages. Without clear movement, traders should focus on tactical trades within this range. As of today, August 7, 2025, USDCAD finds itself in a narrow channel, showcasing market uncertainty. The pair is trapped between the resistance at the 100-day moving average near 1.3795 and the support at the 100-bar moving average around 1.3730. This tight range indicates a period of consolidation before the next big move.

Economic Data and Trading Opportunities

This stagnation comes as recent economic data presents mixed signals. Last week’s US Non-Farm Payrolls report for July 2025 showed an increase of 210,000 jobs, giving the US dollar some support. However, this wasn’t enough to trigger a breakout as the market also considers the Bank of Canada’s next actions. On the Canadian side, WTI crude oil prices are steady at around $85 per barrel, providing support. July’s inflation reading in Canada was 2.9%, slightly above target, but it continues the cooling trend observed since the highs of 2024. This economic context helps explain why sellers haven’t broken the 1.3730 support level. For derivative traders, this low-volatility environment offers unique opportunities in the coming weeks. With one-month implied volatility on USDCAD options dropping to just 5.8%, strategies like short strangles or iron condors could be beneficial. These positions would profit if the pair remains within the 1.3730 to 1.3795 range as we head into September. We have seen similar range-bound behavior before, especially during the fourth quarter of 2024, preceding a sharp trend. A catalyst, likely from upcoming central bank meetings next month, will probably be required to trigger a breakout. Until then, expect range-trading strategies to prevail. Create your live VT Markets account and start trading now.

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