USDCAD experienced an upward movement yesterday, which continued earlier today, yet both attempts were halted near a key resistance confluence. This area includes the 200-day moving average at approximately 1.40111 and swing area resistance ranging from 1.4009 to 1.4027. The high reached today was 1.40157, after which the market rotated lower, confirming the importance of this resistance zone.

The price zone has now thwarted buyer efforts twice, underscoring its role as a barrier that needs to be surpassed to shift the bias upwards. A breakthrough above 1.4027 could pave the way towards the 38.2% retracement level from March’s decline, at 1.40525, with further resistance between 1.4146 and 1.41836 (50% and swing area).

Short Term Support And Resistance

On the downside, immediate support is near 1.3978, aligning with the 200-bar moving average on the 4-hour chart and the previous high from 15 April. Remaining above this level maintains a short-term bullish bias. However, dropping below may lead to a deeper pullback to the 1.38917–1.3904 swing area.

Key technical levels include resistance at 1.4009–1.4027, 1.40525, and 1.4146–1.41836, with support at 1.3978 and 1.38917–1.3904. The bias remains neutral to bullish above 1.3978, with a stronger bullish outlook emerging above 1.4027 and the 38.2% retracement.

That earlier analysis boils down to a simple but important reality: buyers have twice now pushed the pair up into the same resistance zone, only to be met with sellers standing firm. The area around 1.4011 to 1.4027 seems to be holding all the cards for now. Each rejection from this region makes it clearer that participants aren’t yet fully committed to moving the price higher without more compelling reasons or volume behind them.

Now with two failed tries behind us and no clean break above, there’s a sliver of hesitation seeping into short-term momentum. The longer the price remains below that ceiling, the more likely fatigue begins to creep in for those positioned for sustained upside. Technically, the fact that the price couldn’t press through 1.4027 even after brushing 1.40157 hints at short-term order flow leaning defensive.

Impact Of Resistance On Market Sentiment

We’ve seen before how temporary failures to push through a ceiling like this one can encourage quick rotations lower. This time, the bounce back down stopped around 1.3978, which isn’t random. That level lines up with both the 200-bar moving average on the four-hour chart and a prior swing high from mid-April. Staying above that keeps things tilted slightly in favour of rises, but if that level gives way? That would likely unlock room for a larger dip, potentially all the way to where prior buying interest gathered between 1.38917 and 1.3904.

That bottom zone has been tested repeatedly since the end of March, acting like a base of sorts. If price was to return there, and especially if we saw traders hesitate to step in quickly, it would represent a clear change in tone. Such a shift would likely come alongside a cooling in bullish appetite.

Beyond 1.4027, there isn’t much congestion until 1.40525—the level tied to the 38.2% retracement from March’s fall. If the market gets to that point, it would mean sentiment has improved enough to clear resistance that’s held for multiple sessions. From there, attention would turn higher still, with the next zone likely drawing orders around 1.4146 to 1.41836, where technical sellers have previously found value.

For us, this sets up a simple approach. So long as price holds above 1.3978, there’s reason to maintain moderately supportive positioning. That particular barrier isn’t just technical—it’s psychological. Below it, flows would likely become more unsteady, and stops could accelerate short-term downside moves.

We do not expect the 1.4027 area to remain untouched if buyers are truly committed, so repeated nudges at that ceiling should be monitored closely. Rising momentum toward that level should align with volume improvements or shifts in correlated risk pairs.

In summary, movement remains bounded between two defined fences. Buyers must prove they can lift towards and through those higher zones without being swatted back before the close. If they fail again, and particularly if price begins to track under 1.3978, attention shifts quickly to downside opportunity and defence of prior lows. We structure our trades around these levels, and attempt to stay unbiased, adjusting with what we see—not what we assume.

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