The USDCAD recently climbed above the 200-hour moving average at 1.37817 and the 100-day moving average at 1.37876. However, this upward movement quickly stalled, and the price slipped back below both averages. For those interested in selling USD or buying CAD, the 100-day moving average is a good point to consider short positions. If the price continues to drop, watch for targets like the 38.2% retracement at 1.37626 and the 100-hour moving average at 1.3754.

Focus On Retracement Levels

If the price decreases further, attention will shift to the 50% retracement as the next support level. Last week, the price fell below this 50% retracement but then bounced back, showing that similar reversals could happen again. Traders should be careful when breaks fail, as they may not bring sustained momentum. If the price rises above the 100-day moving average, it’s a sign of a possible change in trend and requires risk reassessment. As of today, August 11, 2025, the USDCAD pair displays a clear weakness. Its attempt to rise above the 100-day moving average at 1.37876 has failed, indicating that sellers are gaining control. This rejection at a crucial technical level suggests that the recent upward momentum has likely stalled. This trend aligns with market fundamentals, as West Texas Intermediate crude oil prices have strengthened, trading above $85 a barrel. A robust oil market tends to support the Canadian dollar, putting downward pressure on the USDCAD exchange rate and reinforcing the expectation for further declines.

Opportunities For Derivative Traders

Recent US economic data from July 2025 shows a slowdown in both inflation and job growth. This has led to speculation that the Federal Reserve might pause its interest rate hikes for the year. A less aggressive Fed typically weakens the US dollar, bolstering the bearish outlook for this currency pair. For derivative traders, this offers a solid chance to establish short positions or buy put options in the coming weeks. The 100-day moving average now serves as a strong resistance level to trade against, providing a clear point to manage risk. As long as the price stays below 1.37876, the trend seems likely to head lower. The initial downside target is the 38.2% retracement level at 1.37626. If this level is breached, the next support zone is near the 100-hour moving average at 1.3754. If selling pressure increases, the 50% retracement level will be the next logical target. We should remember market history; earlier this summer, a similar breakdown below the 50% retracement quickly reversed. Watch for failed moves as a key technical pattern. If buyers suddenly reappear and push the price back above the 100-day moving average, it would nullify the bearish outlook. Create your live VT Markets account and start trading now.

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