The USDCAD surged higher on Tuesday, breaking above its 200-hour moving average (green line) with momentum and a downward sloping trend line at the same level. However, buyers ran into firm resistance near the swing area between 1.3685 and 1.3692, a zone that stalled the fall, and capped rallies on multiple occasions in May and early June. The rally also ultimately stalled well short of the 38.2% retracement level from the May high, which comes in at 1.3722. The high-priced history reached 1.36926.
Today, buyers turned to sellers, and the pair has rotated back lower, with support forming near the prior trendline break and just below the 200 moving average (green line), currently at 1.36455. Price action held this level on the pullback, keeping the short-term bias in balance with support at 1.36337 and close resistance near the 200 hour moving average at 1.36455 up to 1.36505.
That area between 1.36455 and 1.36505 now stands as a key pivot. A move above would re-open the door toward the 1.3685–1.3692 resistance zone and possibly the 38.2% retracement at 1.3722.
On the flip side, a break back below the underside of the broken trendline at 1.3637 would open the door for a retest of the 100-hour MA at 1.36103
With the Fed decision later today, traders will be watching whether USD strength can reassert itself—or if the resistance ceiling continues to hold firm.
Key levels to watch:
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Support:
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Resistance:
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1.36455 -1.3650 (200-hour MA and swing level)
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1.3685–1.3692 (swing zone)
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1.3722 (38.2% retracement of May high to June low)
This article was written by Greg Michalowski at www.forexlive.com.
