The USDCAD has been trending higher since bottoming in early September near 1.3750. Buyers have remained firmly in control, with the rising 100-hour moving average providing a reliable floor during the recent advance.
There have been only two hourly bars below that moving average over the stretch described: one on Wednesday following the slightly weaker PCE report and another on Friday after the weaker-than-expected US jobs report. Both breaks were quickly rejected. Sellers had their opportunities, but could not build on them.
The price subsequently extended to new highs for the year on Thursday and again on Friday. Today, that upward bias continued, taking the pair to 1.4293. However, this time buyers ran into a key resistance target—and sellers leaned against it.
Two technical levels give sellers a place to lean
All good things eventually come to an end, including trends. But trying to pick the top of a strong trend can be an expensive exercise. Sellers need a reason to put a toe in the water, along with a level that helps define and limit their risk.
Today, two separate technical measures pointed to almost the same resistance level (see daily chart above):
-
1.42928: The 61.8% retracement of the decline from the late-January 2025 high to the late-January 2026 low.
-
1.4295: The swing high from April 7, 2025.
Those levels are separated by just over two pips. That convergence gave sellers a clearly defined area to lean against, with a move above 1.4300 offering a logical risk reference.
The price reached 1.4293, stalled, and rotated lower. Sellers have finally enjoyed a victory. However, defending resistance is only the first step. They still need to break support to earn a greater reward.
The first downside test is holding—for now
The rotation lower has taken the price back into a swing area between 1.4234 and 1.4247, defined by highs from late June and early July (see red circles on the 4-hour chart above). Today’s low has so far stalled inside that area at 1.4239.
For sellers to take more control, they need to push below 1.4234 and stay below it. Just underneath that level sits the rising 100-hour moving average at 1.42275 (see blue line on the hourly chart at the start of the post), adding another important hurdle.
That moving average matters because buyers have repeatedly used it to keep the trend alive. A sustained break below it would show that this pullback is doing more damage than the brief breaks seen last week.
Until then, buyers still have a support area against which they can lean.
Key technical levels
The downside progression for sellers is:
-
1.4234–1.4247: The swing area containing today’s low at 1.4239.
-
1.42275: The rising 100-hour moving average.
-
1.41845: The 200-hour moving average.
-
1.41297–1.41488: The next lower swing area.
Each break would give sellers another piece of evidence that control is shifting. A break followed by a quick recovery, however, would raise the possibility of another failed downside attempt.
On the topside, 1.42928–1.4295 remains the resistance area to beat. A move above that zone and 1.4300 would put buyers back on the offensive.
Trader education: A top needs confirmation
For newer traders, the lesson is that a rejection at resistance can start a correction, but it does not by itself confirm a trend reversal.
Sellers who leaned against 1.4293 had a technical reason to enter and a nearby level to define their risk. Now they need follow-through. Breaking the swing area and staying below the 100-hour moving average would strengthen their case. Getting below the 200-hour moving average would add another layer of confirmation.
Buyers, meanwhile, will be watching whether the swing area and rising 100-hour moving average hold. If they do, the trend still has its support structure.
Sellers have defended a key topside target. Now they need to break the floors below. Absent those breaks, this remains a correction within a bullish trend.
This article was written by Greg Michalowski at investinglive.com.