During the Asia-Pacific session, USDCAD fell below a key swing area, ranging from 1.38078 to 1.38499, reaching a low of 1.37808 before rebounding to 1.3845. This level aligned with the upper boundary of the swing zone established in October and November 2024.
The price dropped again, breaching the swing area and hitting a new low of 1.37922. However, it rebounded during the European session, climbing above the swing area to an intraday high of 1.38609.
Moving Averages and Market Behavior
This upward move took the pair above the 100-hour moving average at 1.38463, which had served as a ceiling with previous failed attempts to break it earlier in the week. Buyers must maintain the price above this moving average to continue their momentum shift.
Achieving this requires targeting the 200-hour moving average at 1.38828, a level not surpassed since brief pushes in early April. A sustained price above both the 100-hour and 200-hour moving averages could enhance the bullish potential, indicating a shift in short-term technical momentum favourably for buyers.
What we’ve seen is a classic case of resistance giving way, followed by a tentative reclaim. The loonie, when paired with the greenback, initially slipped through a well-tested zone that had previously provided structure during late 2024. That range acted as a buffer for both buyers and sellers, before losing ground in a weak Asia session. Once price action broke beneath 1.3800, even briefly, it suggested that sell-side pressure still had weight. But that didn’t last.
By London hours, buyers had pushed back effectively. The bounce took price all the way up through the upper part of the initial range and then beyond the 100-hour moving average – a level that had proven sticky several times earlier in the week. That kind of behaviour matters. When a marker like the 100-hour moving average moves from being resistance to potential support, we take notice. It’s a sign that sentiment is adjusting, even if only in the short run.
Looking Ahead
There is now a window of opportunity. Price has touched the 1.3860s but is still magnetised to the cluster of moving averages. Notably, the 200-hour measure remains unconquered. That line is far from arbitrary; it has marked upper bounds since early April, and so far, has rejected any attempts to move above it for more than a few hours. If that level gives way with conviction – and holds – we’re looking at a genuine shift.
So where do we go from here?
As long as price sits above the 100-hour level, there are reasons to stay constructive. But that line must remain intact. If it doesn’t, we risk slipping back into the former range, where failed breakouts are common and conviction wanes. In that case, the edge gets lost quickly.
Volume is worth watching too. Any move beyond the 200-hour average needs to be supported by higher-than-average volume to be trusted. Otherwise, it risks fading just as previous attempts have.
The broad takeaway here is momentum. Right now, it’s starting to swing in favour of price recovery – but only just. The open in North America will provide the real test. Until then, price is hovering in a zone where intent hasn’t turned into follow-through. Hold the higher ground, and buyers may have something to build on. Lose it, and we’re back in the same range-bound indecision we’ve seen for weeks.
