The USDCAD has dropped after testing the resistance zone between 1.38917 and 1.3904. Earlier in the session, the pair reached into this important area, which once again acted as a ceiling. The failure to break through resistance, combined with U.S. data on initial jobless claims and CPI, led to a downward movement. On the downside, the price is now approaching the swing area between 1.3812 and 1.3831. This area is supported by the rising 100-hour moving average, currently at 1.3859, which serves as a short-term pivot.

Potential Points Of Support

For those seeking points of support, the 1.3812–1.3831 region is worth watching. If the price bounces from this area, it might regain upward momentum, with resistance likely appearing at the 1.3890–1.3904 zone. If the price falls below the 100-hour moving average and the swing low at 1.3812, sellers could take control, suggesting a bearish trend and a possible further drop. Following the recent rejection at the 1.3904 resistance area, our focus is on the key pivot zone between 1.3812 and 1.3831. This action was influenced by the latest U.S. economic reports, which showed initial jobless claims steady and August’s Consumer Price Index rising slightly to 3.4% year-over-year. The market is now assessing whether this support level, backed by the 100-hour moving average, will hold. The overall economic picture shows a preference for the U.S. dollar, which strengthens this technical crossroad. Canada’s latest jobs report revealed an unexpected loss of 5,000 jobs, indicating some weakness in its economy. This contrasts with a resilient U.S. economy that suggests the Federal Reserve will maintain a hawkish stance based on the data.

Commodity Prices And Market Strategy

Additionally, commodity prices play a crucial role. WTI crude oil has fallen from recent highs above $88 to around $84 a barrel due to global demand concerns. This decline in oil, a key Canadian export, often weighs on the Canadian dollar, making the 1.3812 support level critical for determining the near-term direction. Traders expecting a bounce from this support are considering buying October 2025 call options with a strike price near 1.3850. This strategy aims to capture a potential rebound towards the 1.3900 resistance in the coming weeks. A successful hold of support would indicate that the broader uptrend remains valid. On the other hand, if the price breaks below the 1.3812 floor, it would signal a significant bearish shift in momentum. In this case, we plan to buy October 2025 put options with a strike near 1.3800, allowing us to benefit from a deeper correction as sellers dominate. The current tension between central bank policy expectations highlights the sharp market fluctuations seen in 2023 when differing policies drove currency trends. How the USDCAD behaves around this 1.3812 pivot point will likely influence the pair’s trajectory through the end of the month. Create your live VT Markets account and start trading now.

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